Correlation Between IMAC Holdings and BioCardia
Can any of the company-specific risk be diversified away by investing in both IMAC Holdings 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 IMAC Holdings and BioCardia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMAC Holdings and BioCardia, you can compare the effects of market volatilities on IMAC Holdings 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 IMAC Holdings with a short position of BioCardia. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMAC Holdings and BioCardia.
Diversification Opportunities for IMAC Holdings and BioCardia
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IMAC and BioCardia is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding IMAC Holdings and BioCardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioCardia and IMAC Holdings 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 IMAC Holdings 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 IMAC Holdings i.e., IMAC Holdings and BioCardia go up and down completely randomly.
Pair Corralation between IMAC Holdings and BioCardia
If you would invest (100.00) in BioCardia on August 28, 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 | Moves Together |
| Strength | Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
IMAC Holdings vs. BioCardia
Performance |
| Timeline |
| IMAC Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| BioCardia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IMAC Holdings and BioCardia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMAC Holdings and BioCardia
The main advantage of trading using opposite IMAC Holdings and BioCardia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMAC Holdings 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 IMAC Holdings 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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