Correlation Between NYSE Composite and Biocardia
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Biocardia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Biocardia, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Biocardia. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Biocardia.
Diversification Opportunities for NYSE Composite and Biocardia
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and Biocardia is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Biocardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biocardia and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Biocardia go up and down completely randomly.
Pair Corralation between NYSE Composite and Biocardia
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.07 times more return on investment than Biocardia. However, NYSE Composite is 14.41 times less risky than Biocardia. It trades about 0.06 of its potential returns per unit of risk. Biocardia is currently generating about -0.02 per unit of risk. If you would invest 1,581,890 in NYSE Composite on October 21, 2024 and sell it today you would earn a total of 378,847 from holding NYSE Composite or generate 23.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Biocardia
Performance |
| Timeline |
NYSE Composite and Biocardia Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Biocardia
Pair trading matchups for Biocardia
Pair Trading with NYSE Composite and Biocardia
The main advantage of trading using opposite NYSE Composite and Biocardia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Chart Industries | NYSE Composite vs. Valneva SE ADR | NYSE Composite vs. Schweiter Technologies AG | NYSE Composite vs. Primoris Services |
| Biocardia vs. Aerovate Therapeutics | Biocardia vs. Adagene | Biocardia vs. Acrivon Therapeutics, Common | Biocardia vs. Rezolute |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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