Correlation Between Cardiff Oncology and Mustang Bio

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Can any of the company-specific risk be diversified away by investing in both Cardiff Oncology and Mustang Bio 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 Cardiff Oncology and Mustang Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardiff Oncology and Mustang Bio, you can compare the effects of market volatilities on Cardiff Oncology and Mustang Bio 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 Cardiff Oncology with a short position of Mustang Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardiff Oncology and Mustang Bio.

Diversification Opportunities for Cardiff Oncology and Mustang Bio

0.18
  Correlation Coefficient

Average diversification

The 3 months correlation between Cardiff and Mustang is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cardiff Oncology and Mustang Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mustang Bio and Cardiff Oncology 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 Cardiff Oncology are associated (or correlated) with Mustang Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mustang Bio has no effect on the direction of Cardiff Oncology i.e., Cardiff Oncology and Mustang Bio go up and down completely randomly.

Pair Corralation between Cardiff Oncology and Mustang Bio

Given the investment horizon of 90 days Cardiff Oncology is expected to generate 0.28 times more return on investment than Mustang Bio. However, Cardiff Oncology is 3.62 times less risky than Mustang Bio. It trades about 0.05 of its potential returns per unit of risk. Mustang Bio is currently generating about 0.01 per unit of risk. If you would invest  125.00  in Cardiff Oncology on September 7, 2024 and sell it today you would earn a total of  109.00  from holding Cardiff Oncology or generate 87.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Cardiff Oncology  vs.  Mustang Bio

 Performance 
       Timeline  
Cardiff Oncology 

Risk-Adjusted Performance

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Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Cardiff Oncology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent fundamental indicators, Cardiff Oncology may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Mustang Bio 

Risk-Adjusted Performance

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

Cardiff Oncology and Mustang Bio Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cardiff Oncology and Mustang Bio

The main advantage of trading using opposite Cardiff Oncology and Mustang Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardiff Oncology position performs unexpectedly, Mustang Bio 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 Mustang Bio will offset losses from the drop in Mustang Bio's long position.
The idea behind Cardiff Oncology and Mustang Bio 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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