Correlation Between Biodesix and Star Equity

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

By analyzing existing cross correlation between Biodesix and Star Equity Holdings, you can compare the effects of market volatilities on Biodesix and Star Equity 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 Star Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biodesix and Star Equity.

Diversification Opportunities for Biodesix and Star Equity

0.87

Correlation Coefficient

Biodesix  Star Equity

Very poor diversification

The 3 months correlation between Biodesix and Star is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Biodesix and Star Equity Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Equity Holdings 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 Star Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Equity Holdings has no effect on the direction of Biodesix i.e., Biodesix and Star Equity go up and down completely randomly.

Pair Corralation between Biodesix and Star Equity

Given the investment horizon of 90 days Biodesix is expected to generate 1.32 times more return on investment than Star Equity. However, Biodesix is 1.32 times more volatile than Star Equity Holdings. It trades about -0.1 of its potential returns per unit of risk. Star Equity Holdings is currently generating about -0.17 per unit of risk. If you would invest  180.00  in Biodesix on September 12, 2024 and sell it today you would lose (52.00) from holding Biodesix or give up 28.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Biodesix  vs.  Star Equity Holdings

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 fragile 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.

Star Equity Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Star Equity Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Biodesix and Star Equity

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

The idea behind Biodesix and Star Equity Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.