Correlation Between Castle Biosciences and Interpace Biosciences

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Castle Biosciences and Interpace Biosciences 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 Castle Biosciences and Interpace Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castle Biosciences and Interpace Biosciences, you can compare the effects of market volatilities on Castle Biosciences and Interpace Biosciences 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 Castle Biosciences with a short position of Interpace Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castle Biosciences and Interpace Biosciences.

Diversification Opportunities for Castle Biosciences and Interpace Biosciences

-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Castle and Interpace is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Castle Biosciences and Interpace Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interpace Biosciences and Castle Biosciences 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 Castle Biosciences are associated (or correlated) with Interpace Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interpace Biosciences has no effect on the direction of Castle Biosciences i.e., Castle Biosciences and Interpace Biosciences go up and down completely randomly.

Pair Corralation between Castle Biosciences and Interpace Biosciences

If you would invest  2,948  in Castle Biosciences on September 5, 2024 and sell it today you would earn a total of  130.00  from holding Castle Biosciences or generate 4.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy1.56%
ValuesDaily Returns

Castle Biosciences  vs.  Interpace Biosciences

 Performance 
       Timeline  
Castle Biosciences 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Castle Biosciences are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Castle Biosciences may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Interpace Biosciences 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Interpace Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Interpace Biosciences is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Castle Biosciences and Interpace Biosciences Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Castle Biosciences and Interpace Biosciences

The main advantage of trading using opposite Castle Biosciences and Interpace Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castle Biosciences position performs unexpectedly, Interpace Biosciences 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 Interpace Biosciences will offset losses from the drop in Interpace Biosciences' long position.
The idea behind Castle Biosciences and Interpace Biosciences 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.
Check out your portfolio center.
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

Other Complementary Tools

Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing