Correlation Between Lipella Pharmaceuticals and BioCardia
Can any of the company-specific risk be diversified away by investing in both Lipella 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 Lipella Pharmaceuticals and BioCardia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipella Pharmaceuticals Common and BioCardia, you can compare the effects of market volatilities on Lipella 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 Lipella Pharmaceuticals with a short position of BioCardia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipella Pharmaceuticals and BioCardia.
Diversification Opportunities for Lipella Pharmaceuticals and BioCardia
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lipella and BioCardia is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lipella Pharmaceuticals Common and BioCardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioCardia and Lipella 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 Lipella Pharmaceuticals Common 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 Lipella Pharmaceuticals i.e., Lipella Pharmaceuticals and BioCardia go up and down completely randomly.
Pair Corralation between Lipella Pharmaceuticals and BioCardia
Given the investment horizon of 90 days Lipella Pharmaceuticals Common is expected to generate 0.45 times more return on investment than BioCardia. However, Lipella Pharmaceuticals Common is 2.2 times less risky than BioCardia. It trades about 0.01 of its potential returns per unit of risk. BioCardia is currently generating about -0.16 per unit of risk. If you would invest 524.00 in Lipella Pharmaceuticals Common on August 31, 2024 and sell it today you would lose (213.00) from holding Lipella Pharmaceuticals Common or give up 40.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 25.98% |
| Values | Daily Returns |
Lipella Pharmaceuticals Common vs. BioCardia
Performance |
| Timeline |
| Lipella Pharmaceuticals |
| BioCardia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lipella Pharmaceuticals and BioCardia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipella Pharmaceuticals and BioCardia
The main advantage of trading using opposite Lipella Pharmaceuticals and BioCardia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipella 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.| Lipella Pharmaceuticals vs. Senti Biosciences | Lipella Pharmaceuticals vs. Fennec Pharmaceuticals | Lipella Pharmaceuticals vs. Monopar Therapeutics | Lipella Pharmaceuticals vs. Akeso, Inc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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