Correlation Between Biodesix and Enzo Biochem

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

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

Diversification Opportunities for Biodesix and Enzo Biochem

0.24

Correlation Coefficient

Biodesix  Enzo Biochem

Modest diversification

The 3 months correlation between Biodesix and Enzo is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Biodesix and Enzo Biochem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enzo Biochem and Biodesix 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 Biodesix are associated (or correlated) with Enzo Biochem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enzo Biochem has no effect on the direction of Biodesix i.e., Biodesix and Enzo Biochem go up and down completely randomly.

Pair Corralation between Biodesix and Enzo Biochem

Given the investment horizon of 90 days Biodesix is expected to under-perform the Enzo Biochem. In addition to that, Biodesix is 2.35 times more volatile than Enzo Biochem. It trades about -0.07 of its total potential returns per unit of risk. Enzo Biochem is currently generating about 0.05 per unit of volatility. If you would invest  103.00  in Enzo Biochem on September 2, 2024 and sell it today you would earn a total of  5.00  from holding Enzo Biochem or generate 4.85% return on investment over 90 days.

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

Biodesix  vs.  Enzo Biochem

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.

Enzo Biochem

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enzo Biochem are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Enzo Biochem is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Biodesix and Enzo Biochem

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

The idea behind Biodesix and Enzo Biochem 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.