Correlation Between EXACT Sciences and CareDx
Can any of the company-specific risk be diversified away by investing in both EXACT Sciences and CareDx 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 CareDx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EXACT Sciences and CareDx Inc, you can compare the effects of market volatilities on EXACT Sciences and CareDx 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 CareDx. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXACT Sciences and CareDx.
Diversification Opportunities for EXACT Sciences and CareDx
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EXACT and CareDx is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding EXACT Sciences and CareDx Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareDx Inc 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 CareDx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareDx Inc has no effect on the direction of EXACT Sciences i.e., EXACT Sciences and CareDx go up and down completely randomly.
Pair Corralation between EXACT Sciences and CareDx
Given the investment horizon of 90 days EXACT Sciences is expected to generate 0.39 times more return on investment than CareDx. However, EXACT Sciences is 2.56 times less risky than CareDx. It trades about 0.04 of its potential returns per unit of risk. CareDx Inc is currently generating about -0.04 per unit of risk. If you would invest 4,564 in EXACT Sciences on April 30, 2025 and sell it today you would earn a total of 190.00 from holding EXACT Sciences or generate 4.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
EXACT Sciences vs. CareDx Inc
Performance |
| Timeline |
| EXACT Sciences |
| CareDx Inc |
EXACT Sciences and CareDx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EXACT Sciences and CareDx
The main advantage of trading using opposite EXACT Sciences and CareDx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EXACT Sciences position performs unexpectedly, CareDx 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 CareDx will offset losses from the drop in CareDx's long position.| EXACT Sciences vs. Guardant Health | EXACT Sciences vs. Illumina | EXACT Sciences vs. Twist Bioscience Corp | EXACT Sciences vs. Natera Inc |
| CareDx vs. Personalis | CareDx vs. Twist Bioscience Corp | CareDx vs. Natera Inc | CareDx vs. Guardant Health |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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