Correlation Between Cabaletta Bio and Evofem Biosciences

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Can any of the company-specific risk be diversified away by investing in both Cabaletta Bio and Evofem Biosciences 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 Cabaletta Bio and Evofem Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cabaletta Bio and Evofem Biosciences, you can compare the effects of market volatilities on Cabaletta Bio and Evofem Biosciences 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 Cabaletta Bio with a short position of Evofem Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabaletta Bio and Evofem Biosciences.

Diversification Opportunities for Cabaletta Bio and Evofem Biosciences

CabalettaEvofemDiversified AwayCabalettaEvofemDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Cabaletta and Evofem is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cabaletta Bio and Evofem Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evofem Biosciences and Cabaletta Bio 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 Cabaletta Bio are associated (or correlated) with Evofem Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evofem Biosciences has no effect on the direction of Cabaletta Bio i.e., Cabaletta Bio and Evofem Biosciences go up and down completely randomly.

Pair Corralation between Cabaletta Bio and Evofem Biosciences

If you would invest (100.00) in Evofem Biosciences on November 27, 2024 and sell it today you would earn a total of  100.00  from holding Evofem Biosciences or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Cabaletta Bio  vs.  Evofem Biosciences

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50-40-30-20-10010
JavaScript chart by amCharts 3.21.15CABA EVFMD
       Timeline  
Cabaletta Bio 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Cabaletta Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb22.533.544.555.5
Evofem Biosciences 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Evofem Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Evofem Biosciences is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Cabaletta Bio and Evofem Biosciences Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-14.44-10.82-7.19-3.570.05683.416.8210.2313.64 0.0010.0020.0030.0040.005
JavaScript chart by amCharts 3.21.15CABA EVFMD
       Returns  

Pair Trading with Cabaletta Bio and Evofem Biosciences

The main advantage of trading using opposite Cabaletta Bio and Evofem Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabaletta Bio position performs unexpectedly, Evofem Biosciences 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 Evofem Biosciences will offset losses from the drop in Evofem Biosciences' long position.
The idea behind Cabaletta Bio and Evofem Biosciences 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.
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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