Correlation Between EXACT Sciences and Plumb Balanced
Can any of the company-specific risk be diversified away by investing in both EXACT Sciences and Plumb Balanced 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 EXACT Sciences and Plumb Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EXACT Sciences and Plumb Balanced Fund, you can compare the effects of market volatilities on EXACT Sciences and Plumb Balanced 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 EXACT Sciences with a short position of Plumb Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXACT Sciences and Plumb Balanced.
Diversification Opportunities for EXACT Sciences and Plumb Balanced
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between EXACT and Plumb is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding EXACT Sciences and Plumb Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plumb Balanced and EXACT Sciences 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 EXACT Sciences are associated (or correlated) with Plumb Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plumb Balanced has no effect on the direction of EXACT Sciences i.e., EXACT Sciences and Plumb Balanced go up and down completely randomly.
Pair Corralation between EXACT Sciences and Plumb Balanced
Given the investment horizon of 90 days EXACT Sciences is expected to generate 4.59 times more return on investment than Plumb Balanced. However, EXACT Sciences is 4.59 times more volatile than Plumb Balanced Fund. It trades about -0.03 of its potential returns per unit of risk. Plumb Balanced Fund is currently generating about -0.18 per unit of risk. If you would invest 6,524 in EXACT Sciences on January 26, 2024 and sell it today you would lose (200.00) from holding EXACT Sciences or give up 3.07% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
EXACT Sciences vs. Plumb Balanced Fund
Performance |
Timeline |
EXACT Sciences |
Plumb Balanced |
EXACT Sciences and Plumb Balanced Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EXACT Sciences and Plumb Balanced
The main advantage of trading using opposite EXACT Sciences and Plumb Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EXACT Sciences position performs unexpectedly, Plumb Balanced 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 Plumb Balanced will offset losses from the drop in Plumb Balanced's long position.EXACT Sciences vs. Laboratory of | EXACT Sciences vs. Waters | EXACT Sciences vs. IDEXX Laboratories | EXACT Sciences vs. Revvity |
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Check out your portfolio center.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..
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