Correlation Between Capricor Therapeutics and Moleculin Biotech
Can any of the company-specific risk be diversified away by investing in both Capricor Therapeutics and Moleculin Biotech 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 Moleculin Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capricor Therapeutics and Moleculin Biotech, you can compare the effects of market volatilities on Capricor Therapeutics and Moleculin Biotech 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 Moleculin Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capricor Therapeutics and Moleculin Biotech.
Diversification Opportunities for Capricor Therapeutics and Moleculin Biotech
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capricor and Moleculin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Capricor Therapeutics and Moleculin Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moleculin Biotech 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 Moleculin Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moleculin Biotech has no effect on the direction of Capricor Therapeutics i.e., Capricor Therapeutics and Moleculin Biotech go up and down completely randomly.
Pair Corralation between Capricor Therapeutics and Moleculin Biotech
Given the investment horizon of 90 days Capricor Therapeutics is expected to generate 1.2 times more return on investment than Moleculin Biotech. However, Capricor Therapeutics is 1.2 times more volatile than Moleculin Biotech. It trades about 0.11 of its potential returns per unit of risk. Moleculin Biotech is currently generating about -0.08 per unit of risk. If you would invest 399.00 in Capricor Therapeutics on November 2, 2024 and sell it today you would earn a total of 1,105 from holding Capricor Therapeutics or generate 276.94% 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. Moleculin Biotech
Performance |
| Timeline |
| Capricor Therapeutics |
| Moleculin Biotech |
Capricor Therapeutics and Moleculin Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capricor Therapeutics and Moleculin Biotech
The main advantage of trading using opposite Capricor Therapeutics and Moleculin Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capricor Therapeutics position performs unexpectedly, Moleculin Biotech 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 Moleculin Biotech will offset losses from the drop in Moleculin Biotech's long position.| Capricor Therapeutics vs. Bio Path Holdings | Capricor Therapeutics vs. NextCure | Capricor Therapeutics vs. Pulmatrix | Capricor Therapeutics vs. Akari Therapeutics PLC |
| Moleculin Biotech vs. Pulmatrix | Moleculin Biotech vs. Cyclacel Pharmaceuticals | Moleculin Biotech vs. Akari Therapeutics PLC | Moleculin Biotech 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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