Correlation Between Bio Path and Bellerophon Therapeutics
Can any of the company-specific risk be diversified away by investing in both Bio Path and Bellerophon 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 Bio Path and Bellerophon Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bio Path Holdings and Bellerophon Therapeutics, you can compare the effects of market volatilities on Bio Path and Bellerophon 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 Bio Path with a short position of Bellerophon Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Path and Bellerophon Therapeutics.
Diversification Opportunities for Bio Path and Bellerophon Therapeutics
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bio and Bellerophon is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bio Path Holdings and Bellerophon Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellerophon Therapeutics and Bio Path 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 Bio Path Holdings are associated (or correlated) with Bellerophon Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellerophon Therapeutics has no effect on the direction of Bio Path i.e., Bio Path and Bellerophon Therapeutics go up and down completely randomly.
Pair Corralation between Bio Path and Bellerophon Therapeutics
Given the investment horizon of 90 days Bio Path Holdings is expected to under-perform the Bellerophon Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Bio Path Holdings is 1.46 times less risky than Bellerophon Therapeutics. The stock trades about -0.04 of its potential returns per unit of risk. The Bellerophon Therapeutics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 147.00 in Bellerophon Therapeutics on November 2, 2024 and sell it today you would lose (76.00) from holding Bellerophon Therapeutics or give up 51.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 22.67% |
| Values | Daily Returns |
Bio Path Holdings vs. Bellerophon Therapeutics
Performance |
| Timeline |
| Bio Path Holdings |
| Bellerophon Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bio Path and Bellerophon Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Path and Bellerophon Therapeutics
The main advantage of trading using opposite Bio Path and Bellerophon Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Path position performs unexpectedly, Bellerophon 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 Bellerophon Therapeutics will offset losses from the drop in Bellerophon Therapeutics' long position.| Bio Path vs. Capricor Therapeutics | Bio Path vs. NextCure | Bio Path vs. Pulmatrix | Bio Path vs. Crinetics Pharmaceuticals |
| Bellerophon Therapeutics vs. Bio Path Holdings | Bellerophon Therapeutics vs. Capricor Therapeutics | Bellerophon Therapeutics vs. NextCure | Bellerophon Therapeutics vs. Zura Bio Limited |
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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