Correlation Between ASPEN TECHINC and 10X GENOMICS

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

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

Diversification Opportunities for ASPEN TECHINC and 10X GENOMICS

-0.54

Correlation Coefficient

ASPEN TECHINC  10X GENOMICS

Excellent diversification

The 3 months correlation between ASPEN and 10X is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding ASPEN TECHINC DL and 10X GENOMICS DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 10X GENOMICS DL and ASPEN TECHINC 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 ASPEN TECHINC DL are associated (or correlated) with 10X GENOMICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 10X GENOMICS DL has no effect on the direction of ASPEN TECHINC i.e., ASPEN TECHINC and 10X GENOMICS go up and down completely randomly.

Pair Corralation between ASPEN TECHINC and 10X GENOMICS

Assuming the 90 days horizon ASPEN TECHINC DL is expected to generate 0.17 times more return on investment than 10X GENOMICS. However, ASPEN TECHINC DL is 5.96 times less risky than 10X GENOMICS. It trades about 0.14 of its potential returns per unit of risk. 10X GENOMICS DL is currently generating about -0.09 per unit of risk. If you would invest  23,400  in ASPEN TECHINC DL on October 8, 2024 and sell it today you would earn a total of  400.00  from holding ASPEN TECHINC DL or generate 1.71% return on investment over 90 days.

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

ASPEN TECHINC DL  vs.  10X GENOMICS DL

ASPEN TECHINC DL

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ASPEN TECHINC DL are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ASPEN TECHINC may actually be approaching a critical reversion point that can send shares even higher in February 2025.

10X GENOMICS DL

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with ASPEN TECHINC and 10X GENOMICS

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

The idea behind ASPEN TECHINC DL and 10X GENOMICS DL 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.