Correlation Between Cardio Diagnostics and EnGene Holdings

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

Diversification Opportunities for Cardio Diagnostics and EnGene Holdings

-0.32

Correlation Coefficient

Cardio Diagnostics  EnGene Holdings

Very good diversification

The 3 months correlation between Cardio and EnGene is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cardio Diagnostics Holdings and enGene Holdings Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enGene Holdings Common 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 EnGene Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enGene Holdings Common has no effect on the direction of Cardio Diagnostics i.e., Cardio Diagnostics and EnGene Holdings go up and down completely randomly.

Pair Corralation between Cardio Diagnostics and EnGene Holdings

Assuming the 90 days horizon Cardio Diagnostics Holdings is expected to generate 8.09 times more return on investment than EnGene Holdings. However, Cardio Diagnostics is 8.09 times more volatile than enGene Holdings Common. It trades about 0.09 of its potential returns per unit of risk. enGene Holdings Common is currently generating about 0.03 per unit of risk. If you would invest  4.95  in Cardio Diagnostics Holdings on September 20, 2024 and sell it today you would earn a total of  3.55  from holding Cardio Diagnostics Holdings or generate 71.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	78.83%
Values	Daily Returns

Cardio Diagnostics Holdings  vs.  enGene Holdings Common

Cardio Diagnostics

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cardio Diagnostics Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Cardio Diagnostics showed solid returns over the last few months and may actually be approaching a breakup point.

enGene Holdings Common

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in enGene Holdings Common are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, EnGene Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cardio Diagnostics and EnGene Holdings

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

The idea behind Cardio Diagnostics Holdings and enGene Holdings Common 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.