Correlation Between 10X Genomics and National Research

Can any of the company-specific risk be diversified away by investing in both 10X Genomics and National Research 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 10X Genomics and National Research into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 10X Genomics and National Research Corp, you can compare the effects of market volatilities on 10X Genomics and National Research 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 10X Genomics with a short position of National Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of 10X Genomics and National Research.

Diversification Opportunities for 10X Genomics and National Research

0.84

Correlation Coefficient

10X Genomics  National Research

Very poor diversification

The 3 months correlation between 10X and National is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding 10X Genomics and National Research Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Research Corp and 10X Genomics 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 10X Genomics are associated (or correlated) with National Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Research Corp has no effect on the direction of 10X Genomics i.e., 10X Genomics and National Research go up and down completely randomly.

Pair Corralation between 10X Genomics and National Research

Considering the 90-day investment horizon 10X Genomics is expected to under-perform the National Research. In addition to that, 10X Genomics is 1.78 times more volatile than National Research Corp. It trades about -0.1 of its total potential returns per unit of risk. National Research Corp is currently generating about -0.06 per unit of volatility. If you would invest  2,205  in National Research Corp on September 3, 2024 and sell it today you would lose (239.00) from holding National Research Corp or give up 10.84% of portfolio value over 90 days.

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

10X Genomics  vs.  National Research Corp

10X Genomics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 10X Genomics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

National Research Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Research Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with 10X Genomics and National Research

The main advantage of trading using opposite 10X Genomics and National Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 10X Genomics position performs unexpectedly, National Research 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 National Research will offset losses from the drop in National Research's long position.

The idea behind 10X Genomics and National Research Corp 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.

Check out your portfolio center.

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.