Correlation Between OncoCyte Corp and Biodesix

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

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

Diversification Opportunities for OncoCyte Corp and Biodesix

0.74

Correlation Coefficient

OncoCyte Corp  Biodesix

Poor diversification

The 3 months correlation between OncoCyte and Biodesix is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding OncoCyte Corp and Biodesix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biodesix and OncoCyte Corp 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 OncoCyte Corp are associated (or correlated) with Biodesix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biodesix has no effect on the direction of OncoCyte Corp i.e., OncoCyte Corp and Biodesix go up and down completely randomly.

Pair Corralation between OncoCyte Corp and Biodesix

Considering the 90-day investment horizon OncoCyte Corp is expected to under-perform the Biodesix. But the stock apears to be less risky and, when comparing its historical volatility, OncoCyte Corp is 1.39 times less risky than Biodesix. The stock trades about -0.13 of its potential returns per unit of risk. The Biodesix is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  179.00  in Biodesix on September 15, 2024 and sell it today you would lose (45.00) from holding Biodesix or give up 25.14% of portfolio value over 90 days.

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

OncoCyte Corp  vs.  Biodesix

OncoCyte Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OncoCyte Corp 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 fundamental 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.

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.

Pair Trading with OncoCyte Corp and Biodesix

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

The idea behind OncoCyte Corp and Biodesix 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..