Correlation Between Fennec Pharmaceuticals and BioCardia
Can any of the company-specific risk be diversified away by investing in both Fennec Pharmaceuticals 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 Fennec Pharmaceuticals and BioCardia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fennec Pharmaceuticals and BioCardia, you can compare the effects of market volatilities on Fennec Pharmaceuticals 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 Fennec Pharmaceuticals with a short position of BioCardia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fennec Pharmaceuticals and BioCardia.
Diversification Opportunities for Fennec Pharmaceuticals and BioCardia
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fennec and BioCardia is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Fennec Pharmaceuticals and BioCardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioCardia and Fennec Pharmaceuticals 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 Fennec Pharmaceuticals 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 Fennec Pharmaceuticals i.e., Fennec Pharmaceuticals and BioCardia go up and down completely randomly.
Pair Corralation between Fennec Pharmaceuticals and BioCardia
Given the investment horizon of 90 days Fennec Pharmaceuticals is expected to generate 0.12 times more return on investment than BioCardia. However, Fennec Pharmaceuticals is 8.27 times less risky than BioCardia. It trades about -0.02 of its potential returns per unit of risk. BioCardia is currently generating about -0.06 per unit of risk. If you would invest 685.00 in Fennec Pharmaceuticals on August 28, 2024 and sell it today you would lose (119.00) from holding Fennec Pharmaceuticals or give up 17.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 27.78% |
| Values | Daily Returns |
Fennec Pharmaceuticals vs. BioCardia
Performance |
| Timeline |
| Fennec Pharmaceuticals |
| BioCardia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fennec Pharmaceuticals and BioCardia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fennec Pharmaceuticals and BioCardia
The main advantage of trading using opposite Fennec Pharmaceuticals and BioCardia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fennec Pharmaceuticals 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.| Fennec Pharmaceuticals vs. Eliem Therapeutics | Fennec Pharmaceuticals vs. Scpharmaceuticals | Fennec Pharmaceuticals vs. Milestone Pharmaceuticals | Fennec Pharmaceuticals vs. Seres 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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