Correlation Between Pro Dex and Akoya Biosciences

Can any of the company-specific risk be diversified away by investing in both Pro Dex and Akoya Biosciences at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Pro Dex and Akoya Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pro Dex and Akoya Biosciences, you can compare the effects of market volatilities on Pro Dex and Akoya Biosciences and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Pro Dex with a short position of Akoya Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro Dex and Akoya Biosciences.

Diversification Opportunities for Pro Dex and Akoya Biosciences

-0.27

Correlation Coefficient

Pro Dex  Akoya Biosciences

Very good diversification

The 3 months correlation between Pro and Akoya is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Pro Dex and Akoya Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akoya Biosciences and Pro Dex is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Pro Dex are associated (or correlated) with Akoya Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akoya Biosciences has no effect on the direction of Pro Dex i.e., Pro Dex and Akoya Biosciences go up and down completely randomly.

Pair Corralation between Pro Dex and Akoya Biosciences

Given the investment horizon of 90 days Pro Dex is expected to generate 1.02 times more return on investment than Akoya Biosciences. However, Pro Dex is 1.02 times more volatile than Akoya Biosciences. It trades about 0.25 of its potential returns per unit of risk. Akoya Biosciences is currently generating about 0.01 per unit of risk. If you would invest  2,210  in Pro Dex on September 4, 2024 and sell it today you would earn a total of  2,691  from holding Pro Dex or generate 121.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Pro Dex  vs.  Akoya Biosciences

Pro Dex

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pro Dex are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Pro Dex showed solid returns over the last few months and may actually be approaching a breakup point.

Akoya Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akoya Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Akoya Biosciences is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pro Dex and Akoya Biosciences

The main advantage of trading using opposite Pro Dex and Akoya Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro Dex position performs unexpectedly, Akoya Biosciences can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Akoya Biosciences will offset losses from the drop in Akoya Biosciences' long position.

The idea behind Pro Dex and Akoya Biosciences pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.