Correlation Between Zentalis Pharmaceuticals and BioAffinity Technologies

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

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

Diversification Opportunities for Zentalis Pharmaceuticals and BioAffinity Technologies

-0.03

Correlation Coefficient

Zentalis Pharmaceuticals  BioAffinity Technologies

Good diversification

The 3 months correlation between Zentalis and BioAffinity is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Zentalis Pharmaceuticals Llc and bioAffinity Technologies Warra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioAffinity Technologies and Zentalis Pharmaceuticals 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 Zentalis Pharmaceuticals Llc 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 Zentalis Pharmaceuticals i.e., Zentalis Pharmaceuticals and BioAffinity Technologies go up and down completely randomly.

Pair Corralation between Zentalis Pharmaceuticals and BioAffinity Technologies

Given the investment horizon of 90 days Zentalis Pharmaceuticals Llc is expected to under-perform the BioAffinity Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Zentalis Pharmaceuticals Llc is 10.87 times less risky than BioAffinity Technologies. The stock trades about -0.05 of its potential returns per unit of risk. The bioAffinity Technologies Warrant is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  49.00  in bioAffinity Technologies Warrant on October 7, 2024 and sell it today you would lose (19.00) from holding bioAffinity Technologies Warrant or give up 38.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	74.6%
Values	Daily Returns

Zentalis Pharmaceuticals Llc  vs.  bioAffinity Technologies Warra

Zentalis Pharmaceuticals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Zentalis Pharmaceuticals Llc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Zentalis Pharmaceuticals disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Zentalis Pharmaceuticals and BioAffinity Technologies

The main advantage of trading using opposite Zentalis Pharmaceuticals and BioAffinity Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zentalis Pharmaceuticals 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 Zentalis Pharmaceuticals Llc 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.