Correlation Between Capricor Therapeutics and US Lithium
Can any of the company-specific risk be diversified away by investing in both Capricor Therapeutics and US Lithium 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 US Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capricor Therapeutics and US Lithium Corp, you can compare the effects of market volatilities on Capricor Therapeutics and US Lithium 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 US Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capricor Therapeutics and US Lithium.
Diversification Opportunities for Capricor Therapeutics and US Lithium
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capricor and LITH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Capricor Therapeutics and US Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Lithium Corp 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 US Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Lithium Corp has no effect on the direction of Capricor Therapeutics i.e., Capricor Therapeutics and US Lithium go up and down completely randomly.
Pair Corralation between Capricor Therapeutics and US Lithium
Given the investment horizon of 90 days Capricor Therapeutics is expected to generate 1.31 times more return on investment than US Lithium. However, Capricor Therapeutics is 1.31 times more volatile than US Lithium Corp. It trades about 0.08 of its potential returns per unit of risk. US Lithium Corp is currently generating about 0.05 per unit of risk. If you would invest 407.00 in Capricor Therapeutics on August 29, 2024 and sell it today you would earn a total of 1,497 from holding Capricor Therapeutics or generate 367.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capricor Therapeutics vs. US Lithium Corp
Performance |
| Timeline |
| Capricor Therapeutics |
| US Lithium Corp |
Capricor Therapeutics and US Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capricor Therapeutics and US Lithium
The main advantage of trading using opposite Capricor Therapeutics and US Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capricor Therapeutics position performs unexpectedly, US Lithium 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 US Lithium will offset losses from the drop in US Lithium's long position.| Capricor Therapeutics vs. Bio Path Holdings | Capricor Therapeutics vs. NextCure | Capricor Therapeutics vs. Pulmatrix | Capricor Therapeutics vs. Akari Therapeutics PLC |
| US Lithium vs. Mc Endvrs | US Lithium vs. Kali Inc | US Lithium vs. One World Pharma | US Lithium vs. HempAmericana |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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