Correlation Between Applied Molecular and Biocardia
Can any of the company-specific risk be diversified away by investing in both Applied Molecular and Biocardia 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 Applied Molecular and Biocardia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Molecular Transport and Biocardia, you can compare the effects of market volatilities on Applied Molecular and Biocardia 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 Applied Molecular with a short position of Biocardia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Molecular and Biocardia.
Diversification Opportunities for Applied Molecular and Biocardia
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Applied and Biocardia is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Applied Molecular Transport and Biocardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biocardia and Applied Molecular 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 Applied Molecular Transport are associated (or correlated) with Biocardia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biocardia has no effect on the direction of Applied Molecular i.e., Applied Molecular and Biocardia go up and down completely randomly.
Pair Corralation between Applied Molecular and Biocardia
If you would invest 242.00 in Biocardia on August 30, 2024 and sell it today you would lose (7.00) from holding Biocardia or give up 2.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Applied Molecular Transport vs. Biocardia
Performance |
| Timeline |
| Applied Molecular |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Biocardia |
Applied Molecular and Biocardia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Molecular and Biocardia
The main advantage of trading using opposite Applied Molecular and Biocardia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Molecular position performs unexpectedly, Biocardia 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 Biocardia will offset losses from the drop in Biocardia's long position.| Applied Molecular vs. Aileron Therapeutics | Applied Molecular vs. Bio Path Holdings | Applied Molecular vs. Benitec Biopharma Ltd | Applied Molecular vs. Aerovate Therapeutics |
| Biocardia vs. Aerovate Therapeutics | Biocardia vs. Adagene | Biocardia vs. Acrivon Therapeutics, Common | Biocardia vs. Rezolute |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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