Correlation Between Sera Prognostics and Imagion Biosystems

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

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

Diversification Opportunities for Sera Prognostics and Imagion Biosystems

0.56

Correlation Coefficient

Sera Prognostics  Imagion Biosystems

Very weak diversification

The 3 months correlation between Sera and Imagion is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sera Prognostics and Imagion Biosystems Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imagion Biosystems and Sera Prognostics 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 Sera Prognostics are associated (or correlated) with Imagion Biosystems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imagion Biosystems has no effect on the direction of Sera Prognostics i.e., Sera Prognostics and Imagion Biosystems go up and down completely randomly.

Pair Corralation between Sera Prognostics and Imagion Biosystems

Given the investment horizon of 90 days Sera Prognostics is expected to generate 0.55 times more return on investment than Imagion Biosystems. However, Sera Prognostics is 1.82 times less risky than Imagion Biosystems. It trades about -0.21 of its potential returns per unit of risk. Imagion Biosystems Limited is currently generating about -0.13 per unit of risk. If you would invest  800.00  in Sera Prognostics on December 27, 2024 and sell it today you would lose (410.00) from holding Sera Prognostics or give up 51.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.31%
Values	Daily Returns

Sera Prognostics  vs.  Imagion Biosystems Limited

Sera Prognostics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sera Prognostics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Imagion Biosystems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Imagion Biosystems Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Sera Prognostics and Imagion Biosystems

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

The idea behind Sera Prognostics and Imagion Biosystems Limited 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.