Correlation Between Cardio Diagnostics and Dynavax Technologies

Can any of the company-specific risk be diversified away by investing in both Cardio Diagnostics and Dynavax Technologies 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 Dynavax Technologies 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 Dynavax Technologies, you can compare the effects of market volatilities on Cardio Diagnostics and Dynavax Technologies 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 Dynavax Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardio Diagnostics and Dynavax Technologies.

Diversification Opportunities for Cardio Diagnostics and Dynavax Technologies

-0.52

Correlation Coefficient

Cardio Diagnostics  Dynavax Technologies

Excellent diversification

The 3 months correlation between Cardio and Dynavax is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cardio Diagnostics Holdings and Dynavax Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynavax Technologies 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 Dynavax Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynavax Technologies has no effect on the direction of Cardio Diagnostics i.e., Cardio Diagnostics and Dynavax Technologies go up and down completely randomly.

Pair Corralation between Cardio Diagnostics and Dynavax Technologies

Given the investment horizon of 90 days Cardio Diagnostics Holdings is expected to under-perform the Dynavax Technologies. In addition to that, Cardio Diagnostics is 5.74 times more volatile than Dynavax Technologies. It trades about -0.1 of its total potential returns per unit of risk. Dynavax Technologies is currently generating about 0.08 per unit of volatility. If you would invest  1,283  in Dynavax Technologies on December 28, 2024 and sell it today you would earn a total of  85.00  from holding Dynavax Technologies or generate 6.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cardio Diagnostics Holdings  vs.  Dynavax Technologies

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.

Dynavax Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dynavax Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Dynavax Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Cardio Diagnostics and Dynavax Technologies

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

The idea behind Cardio Diagnostics Holdings and Dynavax Technologies 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.