Correlation Between Sera Prognostics and Imd Companies

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

By analyzing existing cross correlation between Sera Prognostics and Imd Companies, you can compare the effects of market volatilities on Sera Prognostics and Imd Companies 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 Imd Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sera Prognostics and Imd Companies.

Diversification Opportunities for Sera Prognostics and Imd Companies

0.02

Correlation Coefficient

Sera Prognostics  Imd Companies

Significant diversification

The 3 months correlation between Sera and Imd is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sera Prognostics and Imd Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imd Companies 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 Imd Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imd Companies has no effect on the direction of Sera Prognostics i.e., Sera Prognostics and Imd Companies go up and down completely randomly.

Pair Corralation between Sera Prognostics and Imd Companies

Given the investment horizon of 90 days Sera Prognostics is expected to generate 0.35 times more return on investment than Imd Companies. However, Sera Prognostics is 2.89 times less risky than Imd Companies. It trades about 0.32 of its potential returns per unit of risk. Imd Companies is currently generating about -0.01 per unit of risk. If you would invest  644.00  in Sera Prognostics on September 15, 2024 and sell it today you would earn a total of  218.00  from holding Sera Prognostics or generate 33.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Sera Prognostics  vs.  Imd Companies

Sera Prognostics

Risk-Adjusted Performance

4 of 100

Insignificant

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

Imd Companies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Imd Companies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, Imd Companies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sera Prognostics and Imd Companies

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

The idea behind Sera Prognostics and Imd Companies 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.