Correlation Between Capricor Therapeutics and Monopar Therapeutics
Can any of the company-specific risk be diversified away by investing in both Capricor Therapeutics and Monopar 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 Monopar 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 Monopar Therapeutics, you can compare the effects of market volatilities on Capricor Therapeutics and Monopar 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 Monopar Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capricor Therapeutics and Monopar Therapeutics.
Diversification Opportunities for Capricor Therapeutics and Monopar Therapeutics
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capricor and Monopar is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Capricor Therapeutics and Monopar Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monopar 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 Monopar Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monopar Therapeutics has no effect on the direction of Capricor Therapeutics i.e., Capricor Therapeutics and Monopar Therapeutics go up and down completely randomly.
Pair Corralation between Capricor Therapeutics and Monopar Therapeutics
Given the investment horizon of 90 days Capricor Therapeutics is expected to under-perform the Monopar Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Capricor Therapeutics is 1.36 times less risky than Monopar Therapeutics. The stock trades about -0.05 of its potential returns per unit of risk. The Monopar Therapeutics is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 1,457 in Monopar Therapeutics on September 1, 2024 and sell it today you would earn a total of 796.00 from holding Monopar Therapeutics or generate 54.63% 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. Monopar Therapeutics
Performance |
| Timeline |
| Capricor Therapeutics |
| Monopar Therapeutics |
Capricor Therapeutics and Monopar Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capricor Therapeutics and Monopar Therapeutics
The main advantage of trading using opposite Capricor Therapeutics and Monopar Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capricor Therapeutics position performs unexpectedly, Monopar 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 Monopar Therapeutics will offset losses from the drop in Monopar Therapeutics' long position.| Capricor Therapeutics vs. Bio Path Holdings | Capricor Therapeutics vs. NextCure | Capricor Therapeutics vs. Pulmatrix | Capricor Therapeutics vs. Akari Therapeutics PLC |
| Monopar Therapeutics vs. Cue Biopharma | Monopar Therapeutics vs. Tff Pharmaceuticals | Monopar Therapeutics vs. Lantern Pharma | Monopar Therapeutics vs. Eliem Therapeutics |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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