Correlation Between Endonovo Therapeutics and Bio Path

Can any of the company-specific risk be diversified away by investing in both Endonovo Therapeutics and Bio Path 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 Endonovo Therapeutics and Bio Path into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Endonovo Therapeutics and Bio Path Holdings, you can compare the effects of market volatilities on Endonovo Therapeutics and Bio Path 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 Endonovo Therapeutics with a short position of Bio Path. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endonovo Therapeutics and Bio Path.

Diversification Opportunities for Endonovo Therapeutics and Bio Path

-0.07

Correlation Coefficient

Endonovo Therapeutics  Bio Path

Good diversification

The 3 months correlation between Endonovo and Bio is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Endonovo Therapeutics and Bio Path Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Path Holdings and Endonovo Therapeutics 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 Endonovo Therapeutics are associated (or correlated) with Bio Path. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Path Holdings has no effect on the direction of Endonovo Therapeutics i.e., Endonovo Therapeutics and Bio Path go up and down completely randomly.

Pair Corralation between Endonovo Therapeutics and Bio Path

Given the investment horizon of 90 days Endonovo Therapeutics is expected to generate 8.9 times less return on investment than Bio Path. But when comparing it to its historical volatility, Endonovo Therapeutics is 1.01 times less risky than Bio Path. It trades about 0.02 of its potential returns per unit of risk. Bio Path Holdings is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  72.00  in Bio Path Holdings on October 12, 2024 and sell it today you would earn a total of  26.00  from holding Bio Path Holdings or generate 36.11% return on investment over 90 days.

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

Endonovo Therapeutics  vs.  Bio Path Holdings

Endonovo Therapeutics

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Endonovo Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly inconsistent fundamental indicators, Endonovo Therapeutics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Bio Path Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Path Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Bio Path demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Endonovo Therapeutics and Bio Path

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

The idea behind Endonovo Therapeutics and Bio Path Holdings 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.