Correlation Between Codiak BioSciences and Monopar Therapeutics

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

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

Diversification Opportunities for Codiak BioSciences and Monopar Therapeutics

0.0

Correlation Coefficient

Codiak BioSciences  Monopar Therapeutics

Pay attention - limited upside

The 3 months correlation between Codiak and Monopar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Codiak BioSciences and Monopar Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monopar Therapeutics and Codiak BioSciences 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 Codiak BioSciences are associated (or correlated) with Monopar Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monopar Therapeutics has no effect on the direction of Codiak BioSciences i.e., Codiak BioSciences and Monopar Therapeutics go up and down completely randomly.

Pair Corralation between Codiak BioSciences and Monopar Therapeutics

If you would invest  237.00  in Monopar Therapeutics on September 1, 2024 and sell it today you would earn a total of  2,016  from holding Monopar Therapeutics or generate 850.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Codiak BioSciences  vs.  Monopar Therapeutics

Codiak BioSciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Codiak BioSciences has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Codiak BioSciences is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Monopar Therapeutics

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Monopar Therapeutics are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Monopar Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Codiak BioSciences and Monopar Therapeutics

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

The idea behind Codiak BioSciences and Monopar 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.