Correlation Between Fulgent Genetics and Laboratory

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

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

Diversification Opportunities for Fulgent Genetics and Laboratory

-0.42

Correlation Coefficient

Fulgent Genetics  Laboratory

Very good diversification

The 3 months correlation between Fulgent and Laboratory is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fulgent Genetics and Laboratory of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laboratory and Fulgent Genetics 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 Fulgent Genetics are associated (or correlated) with Laboratory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laboratory has no effect on the direction of Fulgent Genetics i.e., Fulgent Genetics and Laboratory go up and down completely randomly.

Pair Corralation between Fulgent Genetics and Laboratory

Given the investment horizon of 90 days Fulgent Genetics is expected to under-perform the Laboratory. In addition to that, Fulgent Genetics is 2.04 times more volatile than Laboratory of. It trades about -0.09 of its total potential returns per unit of risk. Laboratory of is currently generating about 0.07 per unit of volatility. If you would invest  22,902  in Laboratory of on September 2, 2024 and sell it today you would earn a total of  1,214  from holding Laboratory of or generate 5.3% return on investment over 90 days.

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

Fulgent Genetics  vs.  Laboratory of

Fulgent Genetics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fulgent Genetics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Laboratory

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Laboratory of are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Laboratory is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Fulgent Genetics and Laboratory

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

The idea behind Fulgent Genetics and Laboratory of 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.