Correlation Between Biocardia and Applied Molecular
Can any of the company-specific risk be diversified away by investing in both Biocardia and Applied Molecular 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 Biocardia and Applied Molecular into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biocardia and Applied Molecular Transport, you can compare the effects of market volatilities on Biocardia and Applied Molecular 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 Biocardia with a short position of Applied Molecular. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biocardia and Applied Molecular.
Diversification Opportunities for Biocardia and Applied Molecular
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Biocardia and Applied is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Biocardia and Applied Molecular Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Molecular and Biocardia 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 Biocardia are associated (or correlated) with Applied Molecular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Molecular has no effect on the direction of Biocardia i.e., Biocardia and Applied Molecular go up and down completely randomly.
Pair Corralation between Biocardia and Applied Molecular
Given the investment horizon of 90 days Biocardia is expected to under-perform the Applied Molecular. In addition to that, Biocardia is 1.93 times more volatile than Applied Molecular Transport. It trades about -0.02 of its total potential returns per unit of risk. Applied Molecular Transport is currently generating about 0.01 per unit of volatility. If you would invest 34.00 in Applied Molecular Transport on September 2, 2024 and sell it today you would lose (1.00) from holding Applied Molecular Transport or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.06% |
| Values | Daily Returns |
Biocardia vs. Applied Molecular Transport
Performance |
| Timeline |
| Biocardia |
| Applied Molecular |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Biocardia and Applied Molecular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biocardia and Applied Molecular
The main advantage of trading using opposite Biocardia and Applied Molecular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biocardia position performs unexpectedly, Applied Molecular 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 Applied Molecular will offset losses from the drop in Applied Molecular's long position.| Biocardia vs. Aerovate Therapeutics | Biocardia vs. Adagene | Biocardia vs. Acrivon Therapeutics, Common | Biocardia vs. Rezolute |
| Applied Molecular vs. Aileron Therapeutics | Applied Molecular vs. Bio Path Holdings | Applied Molecular vs. Benitec Biopharma Ltd | Applied Molecular vs. Aerovate Therapeutics |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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