Correlation Between Exagen and Personalis

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

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

Diversification Opportunities for Exagen and Personalis

-0.6

Correlation Coefficient

Exagen  Personalis

Excellent diversification

The 3 months correlation between Exagen and Personalis is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Exagen Inc and Personalis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Personalis and Exagen 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 Exagen Inc are associated (or correlated) with Personalis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Personalis has no effect on the direction of Exagen i.e., Exagen and Personalis go up and down completely randomly.

Pair Corralation between Exagen and Personalis

Considering the 90-day investment horizon Exagen Inc is expected to generate 0.9 times more return on investment than Personalis. However, Exagen Inc is 1.11 times less risky than Personalis. It trades about 0.12 of its potential returns per unit of risk. Personalis is currently generating about -0.04 per unit of risk. If you would invest  290.00  in Exagen Inc on September 2, 2024 and sell it today you would earn a total of  107.00  from holding Exagen Inc or generate 36.9% return on investment over 90 days.

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

Exagen Inc  vs.  Personalis

Exagen Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Exagen Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Exagen displayed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Exagen and Personalis

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

The idea behind Exagen Inc and Personalis 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.