Correlation Between T2 Biosystms and Biodesix

Can any of the company-specific risk be diversified away by investing in both T2 Biosystms 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 T2 Biosystms and Biodesix into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between T2 Biosystms and Biodesix, you can compare the effects of market volatilities on T2 Biosystms 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 T2 Biosystms with a short position of Biodesix. Check out your portfolio center. Please also check ongoing floating volatility patterns of T2 Biosystms and Biodesix.

Diversification Opportunities for T2 Biosystms and Biodesix

0.7

Correlation Coefficient

T2 Biosystms  Biodesix

Poor diversification

The 3 months correlation between TTOO and Biodesix is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding T2 Biosystms and Biodesix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biodesix and T2 Biosystms 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 T2 Biosystms 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 T2 Biosystms i.e., T2 Biosystms and Biodesix go up and down completely randomly.

Pair Corralation between T2 Biosystms and Biodesix

Given the investment horizon of 90 days T2 Biosystms is expected to under-perform the Biodesix. In addition to that, T2 Biosystms is 1.38 times more volatile than Biodesix. It trades about -0.36 of its total potential returns per unit of risk. Biodesix is currently generating about -0.07 per unit of volatility. If you would invest  158.00  in Biodesix on October 23, 2024 and sell it today you would lose (43.00) from holding Biodesix or give up 27.22% of portfolio value over 90 days.

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

T2 Biosystms  vs.  Biodesix

T2 Biosystms

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days T2 Biosystms has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with T2 Biosystms and Biodesix

The main advantage of trading using opposite T2 Biosystms and Biodesix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T2 Biosystms 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 T2 Biosystms 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..