Correlation Between HCW Biologics and Miromatrix Medical

Can any of the company-specific risk be diversified away by investing in both HCW Biologics and Miromatrix Medical 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 HCW Biologics and Miromatrix Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HCW Biologics and Miromatrix Medical, you can compare the effects of market volatilities on HCW Biologics and Miromatrix Medical 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 HCW Biologics with a short position of Miromatrix Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCW Biologics and Miromatrix Medical.

Diversification Opportunities for HCW Biologics and Miromatrix Medical

0.0

Correlation Coefficient

HCW Biologics  Miromatrix Medical

Pay attention - limited upside

The 3 months correlation between HCW and Miromatrix is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HCW Biologics and Miromatrix Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miromatrix Medical and HCW Biologics 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 HCW Biologics are associated (or correlated) with Miromatrix Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miromatrix Medical has no effect on the direction of HCW Biologics i.e., HCW Biologics and Miromatrix Medical go up and down completely randomly.

Pair Corralation between HCW Biologics and Miromatrix Medical

Given the investment horizon of 90 days HCW Biologics is expected to generate 2.3 times more return on investment than Miromatrix Medical. However, HCW Biologics is 2.3 times more volatile than Miromatrix Medical. It trades about 0.01 of its potential returns per unit of risk. Miromatrix Medical is currently generating about -0.05 per unit of risk. If you would invest  208.00  in HCW Biologics on October 10, 2024 and sell it today you would lose (167.00) from holding HCW Biologics or give up 80.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	26.06%
Values	Daily Returns

HCW Biologics  vs.  Miromatrix Medical

HCW Biologics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HCW Biologics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HCW Biologics sustained solid returns over the last few months and may actually be approaching a breakup point.

Miromatrix Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Miromatrix Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Miromatrix Medical is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with HCW Biologics and Miromatrix Medical

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

The idea behind HCW Biologics and Miromatrix Medical 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.