Correlation Between Bionano Genomics and G Medical

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

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

Diversification Opportunities for Bionano Genomics and G Medical

0.72

Correlation Coefficient

Bionano Genomics  G Medical

Poor diversification

The 3 months correlation between Bionano and GMVD is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bionano Genomics and G Medical Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Medical Innovations and Bionano 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 Bionano Genomics are associated (or correlated) with G Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Medical Innovations has no effect on the direction of Bionano Genomics i.e., Bionano Genomics and G Medical go up and down completely randomly.

Pair Corralation between Bionano Genomics and G Medical

Given the investment horizon of 90 days Bionano Genomics is expected to generate 0.43 times more return on investment than G Medical. However, Bionano Genomics is 2.34 times less risky than G Medical. It trades about -0.14 of its potential returns per unit of risk. G Medical Innovations is currently generating about -0.07 per unit of risk. If you would invest  1,440  in Bionano Genomics on September 24, 2024 and sell it today you would lose (1,420) from holding Bionano Genomics or give up 98.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	28.11%
Values	Daily Returns

Bionano Genomics  vs.  G Medical Innovations

Bionano Genomics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bionano Genomics 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 very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

G Medical Innovations

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Medical Innovations has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, G Medical is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bionano Genomics and G Medical

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

The idea behind Bionano Genomics and G Medical Innovations 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 Transaction History module to view history of all your transactions and understand their impact on performance.