Correlation Between Personalis and Fonar

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

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

Diversification Opportunities for Personalis and Fonar

0.4

Correlation Coefficient

Personalis  Fonar

Very weak diversification

The 3 months correlation between Personalis and Fonar is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Personalis and Fonar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonar and Personalis 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 Personalis are associated (or correlated) with Fonar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonar has no effect on the direction of Personalis i.e., Personalis and Fonar go up and down completely randomly.

Pair Corralation between Personalis and Fonar

Given the investment horizon of 90 days Personalis is expected to under-perform the Fonar. In addition to that, Personalis is 2.48 times more volatile than Fonar. It trades about -0.11 of its total potential returns per unit of risk. Fonar is currently generating about 0.13 per unit of volatility. If you would invest  1,526  in Fonar on September 2, 2024 and sell it today you would earn a total of  121.00  from holding Fonar or generate 7.93% return on investment over 90 days.

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

Personalis  vs.  Fonar

Personalis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Personalis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Fonar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fonar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Fonar 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 Personalis and Fonar

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

The idea behind Personalis and Fonar 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.