Correlation Between Sera Prognostics and Volitionrx

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

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

Diversification Opportunities for Sera Prognostics and Volitionrx

0.22

Correlation Coefficient

Sera Prognostics  Volitionrx

Modest diversification

The 3 months correlation between Sera and Volitionrx is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sera Prognostics and Volitionrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volitionrx 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 Volitionrx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volitionrx has no effect on the direction of Sera Prognostics i.e., Sera Prognostics and Volitionrx go up and down completely randomly.

Pair Corralation between Sera Prognostics and Volitionrx

Given the investment horizon of 90 days Sera Prognostics is expected to under-perform the Volitionrx. But the stock apears to be less risky and, when comparing its historical volatility, Sera Prognostics is 1.03 times less risky than Volitionrx. The stock trades about -0.12 of its potential returns per unit of risk. The Volitionrx is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  69.00  in Volitionrx on November 29, 2024 and sell it today you would lose (11.00) from holding Volitionrx or give up 15.94% of portfolio value over 90 days.

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

Sera Prognostics  vs.  Volitionrx

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 March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Volitionrx

Risk-Adjusted Performance

Very Weak

Over the last 90 days Volitionrx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Sera Prognostics and Volitionrx

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

The idea behind Sera Prognostics and Volitionrx 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.