Correlation Between Harrow Health and Cyclo Therapeutics
Can any of the company-specific risk be diversified away by investing in both Harrow Health and Cyclo 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 Harrow Health and Cyclo Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harrow Health and Cyclo Therapeutics, you can compare the effects of market volatilities on Harrow Health and Cyclo 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 Harrow Health with a short position of Cyclo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harrow Health and Cyclo Therapeutics.
Diversification Opportunities for Harrow Health and Cyclo Therapeutics
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harrow and Cyclo is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Harrow Health and Cyclo Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyclo Therapeutics and Harrow Health 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 Harrow Health are associated (or correlated) with Cyclo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyclo Therapeutics has no effect on the direction of Harrow Health i.e., Harrow Health and Cyclo Therapeutics go up and down completely randomly.
Pair Corralation between Harrow Health and Cyclo Therapeutics
Given the investment horizon of 90 days Harrow Health is expected to generate 0.44 times more return on investment than Cyclo Therapeutics. However, Harrow Health is 2.28 times less risky than Cyclo Therapeutics. It trades about 0.07 of its potential returns per unit of risk. Cyclo Therapeutics is currently generating about 0.03 per unit of risk. If you would invest 1,239 in Harrow Health on August 24, 2024 and sell it today you would earn a total of 3,149 from holding Harrow Health or generate 254.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Harrow Health vs. Cyclo Therapeutics
Performance |
| Timeline |
| Harrow Health |
| Cyclo Therapeutics |
Harrow Health and Cyclo Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harrow Health and Cyclo Therapeutics
The main advantage of trading using opposite Harrow Health and Cyclo Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harrow Health position performs unexpectedly, Cyclo 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 Cyclo Therapeutics will offset losses from the drop in Cyclo Therapeutics' long position.| Harrow Health vs. Apyx Medical | Harrow Health vs. Eton Pharmaceuticals | Harrow Health vs. Scpharmaceuticals | Harrow Health vs. Fennec Pharmaceuticals |
| Cyclo Therapeutics vs. Radcom | Cyclo Therapeutics vs. BCE Inc | Cyclo Therapeutics vs. Asure Software | Cyclo Therapeutics vs. GoHealth |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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