Correlation Between Mustang Bio and Cardiff Oncology
Can any of the company-specific risk be diversified away by investing in both Mustang Bio and Cardiff Oncology 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 Mustang Bio and Cardiff Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mustang Bio and Cardiff Oncology, you can compare the effects of market volatilities on Mustang Bio and Cardiff Oncology 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 Mustang Bio with a short position of Cardiff Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mustang Bio and Cardiff Oncology.
Diversification Opportunities for Mustang Bio and Cardiff Oncology
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mustang and Cardiff is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Mustang Bio and Cardiff Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardiff Oncology and Mustang Bio 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 Mustang Bio are associated (or correlated) with Cardiff Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardiff Oncology has no effect on the direction of Mustang Bio i.e., Mustang Bio and Cardiff Oncology go up and down completely randomly.
Pair Corralation between Mustang Bio and Cardiff Oncology
Given the investment horizon of 90 days Mustang Bio is expected to under-perform the Cardiff Oncology. In addition to that, Mustang Bio is 1.06 times more volatile than Cardiff Oncology. It trades about -0.07 of its total potential returns per unit of risk. Cardiff Oncology is currently generating about 0.03 per unit of volatility. If you would invest 229.00 in Cardiff Oncology on September 10, 2024 and sell it today you would earn a total of 2.00 from holding Cardiff Oncology or generate 0.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mustang Bio vs. Cardiff Oncology
Performance |
Timeline |
Mustang Bio |
Cardiff Oncology |
Mustang Bio and Cardiff Oncology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mustang Bio and Cardiff Oncology
The main advantage of trading using opposite Mustang Bio and Cardiff Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mustang Bio position performs unexpectedly, Cardiff Oncology 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 Cardiff Oncology will offset losses from the drop in Cardiff Oncology's long position.Mustang Bio vs. Bolt Biotherapeutics | Mustang Bio vs. Keros Therapeutics | Mustang Bio vs. Kezar Life Sciences | Mustang Bio vs. Replimune Group |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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