Correlation Between Qilian International and Capricor Therapeutics
Can any of the company-specific risk be diversified away by investing in both Qilian International and Capricor Therapeutics 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 Qilian International and Capricor Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qilian International Holding and Capricor Therapeutics, you can compare the effects of market volatilities on Qilian International and Capricor Therapeutics 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 Qilian International with a short position of Capricor Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qilian International and Capricor Therapeutics.
Diversification Opportunities for Qilian International and Capricor Therapeutics
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Qilian and Capricor is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Qilian International Holding and Capricor Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capricor Therapeutics and Qilian International 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 Qilian International Holding are associated (or correlated) with Capricor Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capricor Therapeutics has no effect on the direction of Qilian International i.e., Qilian International and Capricor Therapeutics go up and down completely randomly.
Pair Corralation between Qilian International and Capricor Therapeutics
Considering the 90-day investment horizon Qilian International is expected to generate 1.14 times less return on investment than Capricor Therapeutics. In addition to that, Qilian International is 1.25 times more volatile than Capricor Therapeutics. It trades about 0.06 of its total potential returns per unit of risk. Capricor Therapeutics is currently generating about 0.09 per unit of volatility. If you would invest 458.00 in Capricor Therapeutics on August 31, 2024 and sell it today you would earn a total of 1,443 from holding Capricor Therapeutics or generate 315.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qilian International Holding vs. Capricor Therapeutics
Performance |
| Timeline |
| Qilian International |
| Capricor Therapeutics |
Qilian International and Capricor Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qilian International and Capricor Therapeutics
The main advantage of trading using opposite Qilian International and Capricor Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qilian International position performs unexpectedly, Capricor Therapeutics 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 Capricor Therapeutics will offset losses from the drop in Capricor Therapeutics' long position.The idea behind Qilian International Holding and Capricor Therapeutics 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.| Capricor Therapeutics vs. Bio Path Holdings | Capricor Therapeutics vs. NextCure | Capricor Therapeutics vs. Pulmatrix | Capricor Therapeutics vs. Akari Therapeutics PLC |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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