Correlation Between Personalis and OncoCyte Corp

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

By analyzing existing cross correlation between Personalis and OncoCyte Corp, you can compare the effects of market volatilities on Personalis and OncoCyte Corp 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 Personalis with a short position of OncoCyte Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Personalis and OncoCyte Corp.

Diversification Opportunities for Personalis and OncoCyte Corp

-0.42

Correlation Coefficient

Personalis  OncoCyte Corp

Very good diversification

The 3 months correlation between Personalis and OncoCyte is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Personalis and OncoCyte Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OncoCyte Corp and Personalis 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 Personalis are associated (or correlated) with OncoCyte Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OncoCyte Corp has no effect on the direction of Personalis i.e., Personalis and OncoCyte Corp go up and down completely randomly.

Pair Corralation between Personalis and OncoCyte Corp

Given the investment horizon of 90 days Personalis is expected to generate 2.05 times more return on investment than OncoCyte Corp. However, Personalis is 2.05 times more volatile than OncoCyte Corp. It trades about 0.06 of its potential returns per unit of risk. OncoCyte Corp is currently generating about 0.04 per unit of risk. If you would invest  397.00  in Personalis on November 29, 2024 and sell it today you would earn a total of  51.00  from holding Personalis or generate 12.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Personalis  vs.  OncoCyte Corp

Personalis

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Personalis are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Personalis disclosed solid returns over the last few months and may actually be approaching a breakup point.

OncoCyte Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in OncoCyte Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, OncoCyte Corp may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Personalis and OncoCyte Corp

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

The idea behind Personalis and OncoCyte Corp 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.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.