Correlation Between SIGA Technologies and MDxHealth

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

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

Diversification Opportunities for SIGA Technologies and MDxHealth

0.85

Correlation Coefficient

SIGA Technologies  MDxHealth

Very poor diversification

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

Pair Corralation between SIGA Technologies and MDxHealth

Given the investment horizon of 90 days SIGA Technologies is expected to generate 1.02 times more return on investment than MDxHealth. However, SIGA Technologies is 1.02 times more volatile than MDxHealth SA ADR. It trades about 0.0 of its potential returns per unit of risk. MDxHealth SA ADR is currently generating about -0.14 per unit of risk. If you would invest  772.00  in SIGA Technologies on August 31, 2024 and sell it today you would lose (36.00) from holding SIGA Technologies or give up 4.66% of portfolio value over 90 days.

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

SIGA Technologies  vs.  MDxHealth SA ADR

SIGA Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIGA Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, SIGA Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

MDxHealth SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MDxHealth SA ADR 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 fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with SIGA Technologies and MDxHealth

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

The idea behind SIGA Technologies and MDxHealth SA ADR 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.