Correlation Between Lipella Pharmaceuticals and BioCardia

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

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

Diversification Opportunities for Lipella Pharmaceuticals and BioCardia

0.43

Correlation Coefficient

Lipella Pharmaceuticals  BioCardia

Very weak diversification

The 3 months correlation between Lipella and BioCardia is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lipella Pharmaceuticals Common and BioCardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioCardia and Lipella Pharmaceuticals 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 Lipella Pharmaceuticals Common are associated (or correlated) with BioCardia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioCardia has no effect on the direction of Lipella Pharmaceuticals i.e., Lipella Pharmaceuticals and BioCardia go up and down completely randomly.

Pair Corralation between Lipella Pharmaceuticals and BioCardia

If you would invest  302.00  in Lipella Pharmaceuticals Common on September 12, 2024 and sell it today you would lose (3.00) from holding Lipella Pharmaceuticals Common or give up 0.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

Lipella Pharmaceuticals Common  vs.  BioCardia

Lipella Pharmaceuticals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lipella Pharmaceuticals Common are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Lipella Pharmaceuticals displayed solid returns over the last few months and may actually be approaching a breakup point.

BioCardia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioCardia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, BioCardia is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Lipella Pharmaceuticals and BioCardia

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

The idea behind Lipella Pharmaceuticals Common and BioCardia 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.