Correlation Between Capricor Therapeutics and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Capricor Therapeutics and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capricor Therapeutics and Dow Jones Industrial, you can compare the effects of market volatilities on Capricor Therapeutics and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capricor Therapeutics and Dow Jones.
Diversification Opportunities for Capricor Therapeutics and Dow Jones
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capricor and Dow is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Capricor Therapeutics and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Capricor Therapeutics i.e., Capricor Therapeutics and Dow Jones go up and down completely randomly.
Pair Corralation between Capricor Therapeutics and Dow Jones
Given the investment horizon of 90 days Capricor Therapeutics is expected to under-perform the Dow Jones. In addition to that, Capricor Therapeutics is 4.28 times more volatile than Dow Jones Industrial. It trades about -0.11 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of volatility. If you would invest 4,238,757 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 247,274 from holding Dow Jones Industrial or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capricor Therapeutics vs. Dow Jones Industrial
Performance |
| Timeline |
Capricor Therapeutics and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Capricor Therapeutics
Pair trading matchups for Capricor Therapeutics
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Capricor Therapeutics and Dow Jones
The main advantage of trading using opposite Capricor Therapeutics and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capricor Therapeutics position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Capricor Therapeutics vs. Bio Path Holdings | Capricor Therapeutics vs. NextCure | Capricor Therapeutics vs. Pulmatrix | Capricor Therapeutics vs. Akari Therapeutics PLC |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |