Correlation Between Protagenic Therapeutics and Biocardia
Can any of the company-specific risk be diversified away by investing in both Protagenic Therapeutics 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 Protagenic Therapeutics and Biocardia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Protagenic Therapeutics and Biocardia, you can compare the effects of market volatilities on Protagenic Therapeutics 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 Protagenic Therapeutics with a short position of Biocardia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Protagenic Therapeutics and Biocardia.
Diversification Opportunities for Protagenic Therapeutics and Biocardia
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Protagenic and Biocardia is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Protagenic Therapeutics and Biocardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biocardia and Protagenic Therapeutics 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 Protagenic Therapeutics 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 Protagenic Therapeutics i.e., Protagenic Therapeutics and Biocardia go up and down completely randomly.
Pair Corralation between Protagenic Therapeutics and Biocardia
Assuming the 90 days horizon Protagenic Therapeutics is expected to generate 15.5 times more return on investment than Biocardia. However, Protagenic Therapeutics is 15.5 times more volatile than Biocardia. It trades about 0.18 of its potential returns per unit of risk. Biocardia is currently generating about -0.02 per unit of risk. If you would invest 6.00 in Protagenic Therapeutics on August 31, 2024 and sell it today you would lose (5.05) from holding Protagenic Therapeutics or give up 84.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 41.42% |
| Values | Daily Returns |
Protagenic Therapeutics vs. Biocardia
Performance |
| Timeline |
| Protagenic Therapeutics |
| Biocardia |
Protagenic Therapeutics and Biocardia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Protagenic Therapeutics and Biocardia
The main advantage of trading using opposite Protagenic Therapeutics and Biocardia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Protagenic Therapeutics 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 Protagenic Therapeutics 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.| Biocardia vs. Cue Biopharma | Biocardia vs. Eliem Therapeutics | Biocardia vs. Inhibrx | Biocardia vs. Molecular Partners AG |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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