Correlation Between Cardio Diagnostics and 180 Life

Can any of the company-specific risk be diversified away by investing in both Cardio Diagnostics and 180 Life 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 Cardio Diagnostics and 180 Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cardio Diagnostics Holdings and 180 Life Sciences, you can compare the effects of market volatilities on Cardio Diagnostics and 180 Life 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 Cardio Diagnostics with a short position of 180 Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardio Diagnostics and 180 Life.

Diversification Opportunities for Cardio Diagnostics and 180 Life

0.81

Correlation Coefficient

Cardio Diagnostics  180 Life

Very poor diversification

The 3 months correlation between Cardio and 180 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cardio Diagnostics Holdings and 180 Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 180 Life Sciences and Cardio Diagnostics 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 Cardio Diagnostics Holdings are associated (or correlated) with 180 Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 180 Life Sciences has no effect on the direction of Cardio Diagnostics i.e., Cardio Diagnostics and 180 Life go up and down completely randomly.

Pair Corralation between Cardio Diagnostics and 180 Life

Given the investment horizon of 90 days Cardio Diagnostics Holdings is expected to generate 2.11 times more return on investment than 180 Life. However, Cardio Diagnostics is 2.11 times more volatile than 180 Life Sciences. It trades about -0.08 of its potential returns per unit of risk. 180 Life Sciences is currently generating about -0.23 per unit of risk. If you would invest  82.00  in Cardio Diagnostics Holdings on December 28, 2024 and sell it today you would lose (39.00) from holding Cardio Diagnostics Holdings or give up 47.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Cardio Diagnostics Holdings  vs.  180 Life Sciences

Cardio Diagnostics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cardio Diagnostics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

180 Life Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days 180 Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Cardio Diagnostics and 180 Life

The main advantage of trading using opposite Cardio Diagnostics and 180 Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardio Diagnostics position performs unexpectedly, 180 Life 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 180 Life will offset losses from the drop in 180 Life's long position.

The idea behind Cardio Diagnostics Holdings and 180 Life Sciences 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.