Correlation Between Cardiol Therapeutics and Prestige Brand
Can any of the company-specific risk be diversified away by investing in both Cardiol Therapeutics and Prestige Brand 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 Prestige Brand 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 Prestige Brand Holdings, you can compare the effects of market volatilities on Cardiol Therapeutics and Prestige Brand 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 Prestige Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardiol Therapeutics and Prestige Brand.
Diversification Opportunities for Cardiol Therapeutics and Prestige Brand
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cardiol and Prestige is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Cardiol Therapeutics Class and Prestige Brand Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prestige Brand Holdings 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 Prestige Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prestige Brand Holdings has no effect on the direction of Cardiol Therapeutics i.e., Cardiol Therapeutics and Prestige Brand go up and down completely randomly.
Pair Corralation between Cardiol Therapeutics and Prestige Brand
Given the investment horizon of 90 days Cardiol Therapeutics Class is expected to under-perform the Prestige Brand. In addition to that, Cardiol Therapeutics is 2.95 times more volatile than Prestige Brand Holdings. It trades about -0.15 of its total potential returns per unit of risk. Prestige Brand Holdings is currently generating about 0.47 per unit of volatility. If you would invest 6,883 in Prestige Brand Holdings on September 4, 2024 and sell it today you would earn a total of 1,616 from holding Prestige Brand Holdings or generate 23.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardiol Therapeutics Class vs. Prestige Brand Holdings
Performance |
| Timeline |
| Cardiol Therapeutics |
| Prestige Brand Holdings |
Cardiol Therapeutics and Prestige Brand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardiol Therapeutics and Prestige Brand
The main advantage of trading using opposite Cardiol Therapeutics and Prestige Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardiol Therapeutics position performs unexpectedly, Prestige Brand 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 Prestige Brand will offset losses from the drop in Prestige Brand's long position.| Cardiol Therapeutics vs. Flora Growth Corp | Cardiol Therapeutics vs. ABVC Biopharma | Cardiol Therapeutics vs. Indaptus Therapeutics | Cardiol Therapeutics vs. HCW Biologics |
| Prestige Brand vs. Evotec SE ADR | Prestige Brand vs. Supernus Pharmaceuticals | Prestige Brand vs. Collegium Pharmaceutical | Prestige Brand vs. Silver Spike Investment |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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