Correlation Between Predictive Oncology and Avinger

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

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

Diversification Opportunities for Predictive Oncology and Avinger

0.54

Correlation Coefficient

Predictive Oncology  Avinger

Very weak diversification

The 3 months correlation between Predictive and Avinger is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Predictive Oncology and Avinger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avinger and Predictive Oncology 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 Predictive Oncology are associated (or correlated) with Avinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avinger has no effect on the direction of Predictive Oncology i.e., Predictive Oncology and Avinger go up and down completely randomly.

Pair Corralation between Predictive Oncology and Avinger

Given the investment horizon of 90 days Predictive Oncology is expected to under-perform the Avinger. But the stock apears to be less risky and, when comparing its historical volatility, Predictive Oncology is 1.11 times less risky than Avinger. The stock trades about -0.01 of its potential returns per unit of risk. The Avinger is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  98.00  in Avinger on September 2, 2024 and sell it today you would lose (14.00) from holding Avinger or give up 14.29% of portfolio value over 90 days.

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

Predictive Oncology  vs.  Avinger

Predictive Oncology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Predictive Oncology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Predictive Oncology is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Avinger

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avinger has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Avinger is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Predictive Oncology and Avinger

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

The idea behind Predictive Oncology and Avinger 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.