Correlation Between Collegium Pharmaceutical and Cardiol Therapeutics
Can any of the company-specific risk be diversified away by investing in both Collegium Pharmaceutical and Cardiol 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 Collegium Pharmaceutical and Cardiol Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collegium Pharmaceutical and Cardiol Therapeutics Class, you can compare the effects of market volatilities on Collegium Pharmaceutical and Cardiol 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 Collegium Pharmaceutical with a short position of Cardiol Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collegium Pharmaceutical and Cardiol Therapeutics.
Diversification Opportunities for Collegium Pharmaceutical and Cardiol Therapeutics
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Collegium and Cardiol is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Collegium Pharmaceutical and Cardiol Therapeutics Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardiol Therapeutics and Collegium Pharmaceutical 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 Collegium Pharmaceutical are associated (or correlated) with Cardiol Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardiol Therapeutics has no effect on the direction of Collegium Pharmaceutical i.e., Collegium Pharmaceutical and Cardiol Therapeutics go up and down completely randomly.
Pair Corralation between Collegium Pharmaceutical and Cardiol Therapeutics
Given the investment horizon of 90 days Collegium Pharmaceutical is expected to generate 3.46 times less return on investment than Cardiol Therapeutics. But when comparing it to its historical volatility, Collegium Pharmaceutical is 2.42 times less risky than Cardiol Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Cardiol Therapeutics Class is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Cardiol Therapeutics Class on September 4, 2024 and sell it today you would earn a total of 87.00 from holding Cardiol Therapeutics Class or generate 124.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collegium Pharmaceutical vs. Cardiol Therapeutics Class
Performance |
| Timeline |
| Collegium Pharmaceutical |
| Cardiol Therapeutics |
Collegium Pharmaceutical and Cardiol Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collegium Pharmaceutical and Cardiol Therapeutics
The main advantage of trading using opposite Collegium Pharmaceutical and Cardiol Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collegium Pharmaceutical position performs unexpectedly, Cardiol 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 Cardiol Therapeutics will offset losses from the drop in Cardiol Therapeutics' long position.| Collegium Pharmaceutical vs. Phibro Animal Health | Collegium Pharmaceutical vs. ANI Pharmaceuticals | Collegium Pharmaceutical vs. Procaps Group SA | Collegium Pharmaceutical vs. Silver Spike Investment |
| Cardiol Therapeutics vs. Flora Growth Corp | Cardiol Therapeutics vs. ABVC Biopharma | Cardiol Therapeutics vs. Indaptus Therapeutics | Cardiol Therapeutics vs. HCW Biologics |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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