Correlation Between RenovoRx and Capricor Therapeutics
Can any of the company-specific risk be diversified away by investing in both RenovoRx 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 RenovoRx and Capricor Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RenovoRx and Capricor Therapeutics, you can compare the effects of market volatilities on RenovoRx 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 RenovoRx with a short position of Capricor Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of RenovoRx and Capricor Therapeutics.
Diversification Opportunities for RenovoRx and Capricor Therapeutics
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RenovoRx and Capricor is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding RenovoRx and Capricor Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capricor Therapeutics and RenovoRx 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 RenovoRx 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 RenovoRx i.e., RenovoRx and Capricor Therapeutics go up and down completely randomly.
Pair Corralation between RenovoRx and Capricor Therapeutics
Given the investment horizon of 90 days RenovoRx is expected to generate 1.13 times more return on investment than Capricor Therapeutics. However, RenovoRx is 1.13 times more volatile than Capricor Therapeutics. It trades about 0.22 of its potential returns per unit of risk. Capricor Therapeutics is currently generating about -0.14 per unit of risk. If you would invest 103.00 in RenovoRx on August 30, 2024 and sell it today you would earn a total of 23.00 from holding RenovoRx or generate 22.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RenovoRx vs. Capricor Therapeutics
Performance |
| Timeline |
| RenovoRx |
| Capricor Therapeutics |
RenovoRx and Capricor Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RenovoRx and Capricor Therapeutics
The main advantage of trading using opposite RenovoRx and Capricor Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RenovoRx 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.| RenovoRx vs. Ikena Oncology | RenovoRx vs. Eliem Therapeutics | RenovoRx vs. HCW Biologics | RenovoRx vs. Tempest Therapeutics |
| Capricor Therapeutics vs. Ikena Oncology | Capricor Therapeutics vs. Eliem Therapeutics | Capricor Therapeutics vs. HCW Biologics | Capricor Therapeutics vs. RenovoRx |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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