Correlation Between Sharps Technology and BioAffinity Technologies

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

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

Diversification Opportunities for Sharps Technology and BioAffinity Technologies

0.7

Correlation Coefficient

Sharps Technology  BioAffinity Technologies

Poor diversification

The 3 months correlation between Sharps and BioAffinity is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sharps Technology Warrant and bioAffinity Technologies Warra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioAffinity Technologies and Sharps Technology 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 Sharps Technology Warrant are associated (or correlated) with BioAffinity Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioAffinity Technologies has no effect on the direction of Sharps Technology i.e., Sharps Technology and BioAffinity Technologies go up and down completely randomly.

Pair Corralation between Sharps Technology and BioAffinity Technologies

Assuming the 90 days horizon Sharps Technology Warrant is expected to generate 0.74 times more return on investment than BioAffinity Technologies. However, Sharps Technology Warrant is 1.36 times less risky than BioAffinity Technologies. It trades about 0.02 of its potential returns per unit of risk. bioAffinity Technologies Warrant is currently generating about -0.09 per unit of risk. If you would invest  4.00  in Sharps Technology Warrant on September 15, 2024 and sell it today you would lose (0.28) from holding Sharps Technology Warrant or give up 7.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	80.95%
Values	Daily Returns

Sharps Technology Warrant  vs.  bioAffinity Technologies Warra

Sharps Technology Warrant

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sharps Technology Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly uncertain basic indicators, Sharps Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BioAffinity Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days bioAffinity Technologies Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Sharps Technology and BioAffinity Technologies

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

The idea behind Sharps Technology Warrant and bioAffinity Technologies Warrant 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.