Correlation Between Moleculin Biotech and Capricor Therapeutics
Can any of the company-specific risk be diversified away by investing in both Moleculin Biotech and Capricor 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 Moleculin Biotech and Capricor Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moleculin Biotech and Capricor Therapeutics, you can compare the effects of market volatilities on Moleculin Biotech and Capricor 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 Moleculin Biotech with a short position of Capricor Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moleculin Biotech and Capricor Therapeutics.
Diversification Opportunities for Moleculin Biotech and Capricor Therapeutics
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Moleculin and Capricor is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Moleculin Biotech and Capricor Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capricor Therapeutics and Moleculin Biotech 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 Moleculin Biotech are associated (or correlated) with Capricor Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capricor Therapeutics has no effect on the direction of Moleculin Biotech i.e., Moleculin Biotech and Capricor Therapeutics go up and down completely randomly.
Pair Corralation between Moleculin Biotech and Capricor Therapeutics
Given the investment horizon of 90 days Moleculin Biotech is expected to under-perform the Capricor Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Moleculin Biotech is 1.04 times less risky than Capricor Therapeutics. The stock trades about -0.06 of its potential returns per unit of risk. The Capricor Therapeutics is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 401.00 in Capricor Therapeutics on November 2, 2024 and sell it today you would earn a total of 1,085 from holding Capricor Therapeutics or generate 270.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moleculin Biotech vs. Capricor Therapeutics
Performance |
| Timeline |
| Moleculin Biotech |
| Capricor Therapeutics |
Moleculin Biotech and Capricor Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moleculin Biotech and Capricor Therapeutics
The main advantage of trading using opposite Moleculin Biotech and Capricor Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moleculin Biotech position performs unexpectedly, Capricor 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 Capricor Therapeutics will offset losses from the drop in Capricor Therapeutics' long position.| Moleculin Biotech vs. Pulmatrix | Moleculin Biotech vs. Cyclacel Pharmaceuticals | Moleculin Biotech vs. Akari Therapeutics PLC | Moleculin Biotech vs. Bio Path Holdings |
| Capricor Therapeutics vs. Bio Path Holdings | Capricor Therapeutics vs. NextCure | Capricor Therapeutics vs. Pulmatrix | Capricor Therapeutics vs. Akari Therapeutics PLC |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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