Correlation Between Bio Path and HCW Biologics
Can any of the company-specific risk be diversified away by investing in both Bio Path and HCW Biologics 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 HCW Biologics 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 HCW Biologics, you can compare the effects of market volatilities on Bio Path and HCW Biologics 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 HCW Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Path and HCW Biologics.
Diversification Opportunities for Bio Path and HCW Biologics
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bio and HCW is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bio Path Holdings and HCW Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCW Biologics 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 HCW Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCW Biologics has no effect on the direction of Bio Path i.e., Bio Path and HCW Biologics go up and down completely randomly.
Pair Corralation between Bio Path and HCW Biologics
Given the investment horizon of 90 days Bio Path Holdings is expected to under-perform the HCW Biologics. But the stock apears to be less risky and, when comparing its historical volatility, Bio Path Holdings is 1.95 times less risky than HCW Biologics. The stock trades about -0.07 of its potential returns per unit of risk. The HCW Biologics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 215.00 in HCW Biologics on August 31, 2024 and sell it today you would lose (168.00) from holding HCW Biologics or give up 78.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Bio Path Holdings vs. HCW Biologics
Performance |
| Timeline |
| Bio Path Holdings |
| HCW Biologics |
Bio Path and HCW Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Path and HCW Biologics
The main advantage of trading using opposite Bio Path and HCW Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Path position performs unexpectedly, HCW Biologics 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 HCW Biologics will offset losses from the drop in HCW Biologics' long position.| Bio Path vs. Capricor Therapeutics | Bio Path vs. NextCure | Bio Path vs. Pulmatrix | Bio Path vs. Crinetics Pharmaceuticals |
| HCW Biologics vs. Anebulo Pharmaceuticals | HCW Biologics vs. Rezolute | HCW Biologics vs. Eliem Therapeutics | HCW Biologics vs. Molecular Partners AG |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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