Correlation Between Capricor Therapeutics and Avenue Therapeutics
Can any of the company-specific risk be diversified away by investing in both Capricor Therapeutics and Avenue 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 Capricor Therapeutics and Avenue Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capricor Therapeutics and Avenue Therapeutics, you can compare the effects of market volatilities on Capricor Therapeutics and Avenue 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 Capricor Therapeutics with a short position of Avenue Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capricor Therapeutics and Avenue Therapeutics.
Diversification Opportunities for Capricor Therapeutics and Avenue Therapeutics
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capricor and Avenue is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Capricor Therapeutics and Avenue Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avenue Therapeutics and Capricor Therapeutics 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 Capricor Therapeutics are associated (or correlated) with Avenue Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avenue Therapeutics has no effect on the direction of Capricor Therapeutics i.e., Capricor Therapeutics and Avenue Therapeutics go up and down completely randomly.
Pair Corralation between Capricor Therapeutics and Avenue Therapeutics
Given the investment horizon of 90 days Capricor Therapeutics is expected to generate 0.73 times more return on investment than Avenue Therapeutics. However, Capricor Therapeutics is 1.37 times less risky than Avenue Therapeutics. It trades about 0.08 of its potential returns per unit of risk. Avenue Therapeutics is currently generating about -0.07 per unit of risk. If you would invest 418.00 in Capricor Therapeutics on August 26, 2024 and sell it today you would earn a total of 1,444 from holding Capricor Therapeutics or generate 345.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capricor Therapeutics vs. Avenue Therapeutics
Performance |
| Timeline |
| Capricor Therapeutics |
| Avenue Therapeutics |
Capricor Therapeutics and Avenue Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capricor Therapeutics and Avenue Therapeutics
The main advantage of trading using opposite Capricor Therapeutics and Avenue Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capricor Therapeutics position performs unexpectedly, Avenue 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 Avenue Therapeutics will offset losses from the drop in Avenue Therapeutics' long position.| Capricor Therapeutics vs. Bio Path Holdings | Capricor Therapeutics vs. NextCure | Capricor Therapeutics vs. Pulmatrix | Capricor Therapeutics vs. Akari Therapeutics PLC |
| Avenue Therapeutics vs. Capricor Therapeutics | Avenue Therapeutics vs. Akari Therapeutics PLC | Avenue Therapeutics vs. Soleno Therapeutics | Avenue Therapeutics vs. Bio Path Holdings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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