Correlation Between Neuronetics and Personalis

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

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

Diversification Opportunities for Neuronetics and Personalis

0.33

Correlation Coefficient

Neuronetics  Personalis

Weak diversification

The 3 months correlation between Neuronetics and Personalis is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Neuronetics and Personalis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Personalis and Neuronetics 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 Neuronetics are associated (or correlated) with Personalis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Personalis has no effect on the direction of Neuronetics i.e., Neuronetics and Personalis go up and down completely randomly.

Pair Corralation between Neuronetics and Personalis

Given the investment horizon of 90 days Neuronetics is expected to generate 1.07 times more return on investment than Personalis. However, Neuronetics is 1.07 times more volatile than Personalis. It trades about 0.33 of its potential returns per unit of risk. Personalis is currently generating about 0.06 per unit of risk. If you would invest  100.00  in Neuronetics on November 29, 2024 and sell it today you would earn a total of  363.00  from holding Neuronetics or generate 363.0% return on investment over 90 days.

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

Neuronetics  vs.  Personalis

Neuronetics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Neuronetics are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Neuronetics displayed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Neuronetics and Personalis

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

The idea behind Neuronetics and Personalis 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.