Correlation Between Trinity Biotech and Biodesix

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

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

Diversification Opportunities for Trinity Biotech and Biodesix

0.28

Correlation Coefficient

Trinity Biotech  Biodesix

Modest diversification

The 3 months correlation between Trinity and Biodesix is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Trinity Biotech plc and Biodesix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biodesix and Trinity Biotech 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 Trinity Biotech plc are associated (or correlated) with Biodesix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biodesix has no effect on the direction of Trinity Biotech i.e., Trinity Biotech and Biodesix go up and down completely randomly.

Pair Corralation between Trinity Biotech and Biodesix

Given the investment horizon of 90 days Trinity Biotech plc is expected to under-perform the Biodesix. In addition to that, Trinity Biotech is 1.41 times more volatile than Biodesix. It trades about -0.1 of its total potential returns per unit of risk. Biodesix is currently generating about -0.07 per unit of volatility. If you would invest  185.00  in Biodesix on September 2, 2024 and sell it today you would lose (41.00) from holding Biodesix or give up 22.16% of portfolio value over 90 days.

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

Trinity Biotech plc  vs.  Biodesix

Trinity Biotech plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trinity Biotech plc 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 forward indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Biodesix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biodesix 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 basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Trinity Biotech and Biodesix

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

The idea behind Trinity Biotech plc and Biodesix 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.