Correlation Between Augmedix and Dermata Therapeutics

Can any of the company-specific risk be diversified away by investing in both Augmedix and Dermata 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 Augmedix and Dermata Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Augmedix and Dermata Therapeutics Warrant, you can compare the effects of market volatilities on Augmedix and Dermata 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 Augmedix with a short position of Dermata Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Augmedix and Dermata Therapeutics.

Diversification Opportunities for Augmedix and Dermata Therapeutics

0.03

Correlation Coefficient

Augmedix  Dermata Therapeutics

Significant diversification

The 3 months correlation between Augmedix and Dermata is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Augmedix and Dermata Therapeutics Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dermata Therapeutics and Augmedix 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 Augmedix are associated (or correlated) with Dermata Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dermata Therapeutics has no effect on the direction of Augmedix i.e., Augmedix and Dermata Therapeutics go up and down completely randomly.

Pair Corralation between Augmedix and Dermata Therapeutics

Given the investment horizon of 90 days Augmedix is expected to generate 256.42 times less return on investment than Dermata Therapeutics. But when comparing it to its historical volatility, Augmedix is 17.49 times less risky than Dermata Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Dermata Therapeutics Warrant is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1.10  in Dermata Therapeutics Warrant on September 20, 2024 and sell it today you would earn a total of  0.35  from holding Dermata Therapeutics Warrant or generate 31.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	63.43%
Values	Daily Returns

Augmedix  vs.  Dermata Therapeutics Warrant

Augmedix

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Augmedix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Augmedix is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dermata Therapeutics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dermata Therapeutics Warrant are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Dermata Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Augmedix and Dermata Therapeutics

The main advantage of trading using opposite Augmedix and Dermata Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Augmedix position performs unexpectedly, Dermata 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 Dermata Therapeutics will offset losses from the drop in Dermata Therapeutics' long position.

The idea behind Augmedix and Dermata Therapeutics Warrant 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.