Correlation Between Entera Bio and BioCardia
Can any of the company-specific risk be diversified away by investing in both Entera Bio and BioCardia 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 Entera Bio and BioCardia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entera Bio and BioCardia, you can compare the effects of market volatilities on Entera Bio and BioCardia 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 Entera Bio with a short position of BioCardia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entera Bio and BioCardia.
Diversification Opportunities for Entera Bio and BioCardia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Entera and BioCardia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Entera Bio and BioCardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioCardia and Entera Bio 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 Entera Bio are associated (or correlated) with BioCardia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioCardia has no effect on the direction of Entera Bio i.e., Entera Bio and BioCardia go up and down completely randomly.
Pair Corralation between Entera Bio and BioCardia
If you would invest (100.00) in BioCardia on November 19, 2024 and sell it today you would earn a total of 100.00 from holding BioCardia or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entera Bio vs. BioCardia
Performance |
| Timeline |
| Entera Bio |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| BioCardia |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Entera Bio and BioCardia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entera Bio and BioCardia
The main advantage of trading using opposite Entera Bio and BioCardia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entera Bio position performs unexpectedly, BioCardia 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 BioCardia will offset losses from the drop in BioCardia's long position.The idea behind Entera Bio and BioCardia pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Stocks Directory module to find actively traded stocks across global markets.
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