Correlation Between Cardio Diagnostics and Ibio

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

Diversification Opportunities for Cardio Diagnostics and Ibio

-0.23

Correlation Coefficient

Cardio Diagnostics  Ibio

Very good diversification

The 3 months correlation between Cardio and Ibio is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Cardio Diagnostics Holdings and Ibio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ibio Inc 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 Ibio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ibio Inc has no effect on the direction of Cardio Diagnostics i.e., Cardio Diagnostics and Ibio go up and down completely randomly.

Pair Corralation between Cardio Diagnostics and Ibio

Assuming the 90 days horizon Cardio Diagnostics Holdings is expected to generate 7.71 times more return on investment than Ibio. However, Cardio Diagnostics is 7.71 times more volatile than Ibio Inc. It trades about 0.25 of its potential returns per unit of risk. Ibio Inc is currently generating about -0.07 per unit of risk. If you would invest  3.86  in Cardio Diagnostics Holdings on October 4, 2024 and sell it today you would earn a total of  4.43  from holding Cardio Diagnostics Holdings or generate 114.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Cardio Diagnostics Holdings  vs.  Ibio Inc

Cardio Diagnostics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cardio Diagnostics Holdings are ranked lower than 13 (%) 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.

Ibio Inc

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ibio Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Ibio displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cardio Diagnostics and Ibio

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

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