Correlation Between Pro Dex and Singular Genomics

Can any of the company-specific risk be diversified away by investing in both Pro Dex and Singular Genomics 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 Singular Genomics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pro Dex and Singular Genomics Systems, you can compare the effects of market volatilities on Pro Dex and Singular Genomics 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 Singular Genomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro Dex and Singular Genomics.

Diversification Opportunities for Pro Dex and Singular Genomics

0.85

Correlation Coefficient

Pro Dex  Singular Genomics

Very poor diversification

The 3 months correlation between Pro and Singular is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Pro Dex and Singular Genomics Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singular Genomics Systems 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 Singular Genomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singular Genomics Systems has no effect on the direction of Pro Dex i.e., Pro Dex and Singular Genomics go up and down completely randomly.

Pair Corralation between Pro Dex and Singular Genomics

Given the investment horizon of 90 days Pro Dex is expected to generate 2.01 times less return on investment than Singular Genomics. But when comparing it to its historical volatility, Pro Dex is 3.1 times less risky than Singular Genomics. It trades about 0.26 of its potential returns per unit of risk. Singular Genomics Systems is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  628.00  in Singular Genomics Systems on September 3, 2024 and sell it today you would earn a total of  1,562  from holding Singular Genomics Systems or generate 248.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Pro Dex  vs.  Singular Genomics Systems

Pro Dex

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pro Dex are ranked lower than 20 (%) 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.

Singular Genomics Systems

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Singular Genomics Systems are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Singular Genomics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pro Dex and Singular Genomics

The main advantage of trading using opposite Pro Dex and Singular Genomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro Dex position performs unexpectedly, Singular Genomics 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 Singular Genomics will offset losses from the drop in Singular Genomics' long position.

The idea behind Pro Dex and Singular Genomics Systems 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.