Correlation Between Cardiol Therapeutics and Collegium Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Cardiol Therapeutics and Collegium Pharmaceutical 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 Cardiol Therapeutics and Collegium Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardiol Therapeutics Class and Collegium Pharmaceutical, you can compare the effects of market volatilities on Cardiol Therapeutics and Collegium Pharmaceutical 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 Cardiol Therapeutics with a short position of Collegium Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardiol Therapeutics and Collegium Pharmaceutical.
Diversification Opportunities for Cardiol Therapeutics and Collegium Pharmaceutical
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cardiol and Collegium is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cardiol Therapeutics Class and Collegium Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collegium Pharmaceutical and Cardiol 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 Cardiol Therapeutics Class are associated (or correlated) with Collegium Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collegium Pharmaceutical has no effect on the direction of Cardiol Therapeutics i.e., Cardiol Therapeutics and Collegium Pharmaceutical go up and down completely randomly.
Pair Corralation between Cardiol Therapeutics and Collegium Pharmaceutical
Given the investment horizon of 90 days Cardiol Therapeutics Class is expected to generate 2.42 times more return on investment than Collegium Pharmaceutical. However, Cardiol Therapeutics is 2.42 times more volatile than Collegium Pharmaceutical. It trades about 0.06 of its potential returns per unit of risk. Collegium Pharmaceutical is currently generating about 0.04 per unit of risk. 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 |
Cardiol Therapeutics Class vs. Collegium Pharmaceutical
Performance |
| Timeline |
| Cardiol Therapeutics |
| Collegium Pharmaceutical |
Cardiol Therapeutics and Collegium Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardiol Therapeutics and Collegium Pharmaceutical
The main advantage of trading using opposite Cardiol Therapeutics and Collegium Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardiol Therapeutics position performs unexpectedly, Collegium Pharmaceutical 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 Collegium Pharmaceutical will offset losses from the drop in Collegium Pharmaceutical's long position.| Cardiol Therapeutics vs. Flora Growth Corp | Cardiol Therapeutics vs. ABVC Biopharma | Cardiol Therapeutics vs. Indaptus Therapeutics | Cardiol Therapeutics vs. HCW Biologics |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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