Correlation Between Bio Path and Endonovo Therapeutics

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

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

Diversification Opportunities for Bio Path and Endonovo Therapeutics

0.08

Correlation Coefficient

Bio Path  Endonovo Therapeutics

Significant diversification

The 3 months correlation between Bio and Endonovo is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bio Path Holdings and Endonovo Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endonovo Therapeutics and Bio Path 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 Bio Path Holdings are associated (or correlated) with Endonovo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endonovo Therapeutics has no effect on the direction of Bio Path i.e., Bio Path and Endonovo Therapeutics go up and down completely randomly.

Pair Corralation between Bio Path and Endonovo Therapeutics

Given the investment horizon of 90 days Bio Path Holdings is expected to under-perform the Endonovo Therapeutics. But the otc stock apears to be less risky and, when comparing its historical volatility, Bio Path Holdings is 2.33 times less risky than Endonovo Therapeutics. The otc stock trades about -0.17 of its potential returns per unit of risk. The Endonovo Therapeutics is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.04  in Endonovo Therapeutics on December 20, 2024 and sell it today you would lose (0.02) from holding Endonovo Therapeutics or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	71.19%
Values	Daily Returns

Bio Path Holdings  vs.  Endonovo Therapeutics

Bio Path Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bio Path Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Endonovo Therapeutics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Endonovo Therapeutics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental indicators, Endonovo Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bio Path and Endonovo Therapeutics

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

The idea behind Bio Path Holdings and Endonovo Therapeutics 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.