Correlation Between Regenxbio and Cardiff Oncology

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

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

Diversification Opportunities for Regenxbio and Cardiff Oncology

-0.25

Correlation Coefficient

Regenxbio  Cardiff Oncology

Very good diversification

The 3 months correlation between Regenxbio and Cardiff is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Regenxbio and Cardiff Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardiff Oncology and Regenxbio 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 Regenxbio 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 Regenxbio i.e., Regenxbio and Cardiff Oncology go up and down completely randomly.

Pair Corralation between Regenxbio and Cardiff Oncology

Given the investment horizon of 90 days Regenxbio is expected to under-perform the Cardiff Oncology. But the stock apears to be less risky and, when comparing its historical volatility, Regenxbio is 1.2 times less risky than Cardiff Oncology. The stock trades about -0.06 of its potential returns per unit of risk. The Cardiff Oncology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  231.00  in Cardiff Oncology on September 7, 2024 and sell it today you would earn a total of  3.00  from holding Cardiff Oncology or generate 1.3% return on investment over 90 days.

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

Regenxbio  vs.  Cardiff Oncology

Regenxbio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Regenxbio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Cardiff Oncology

Risk-Adjusted Performance

2 of 100

Weak

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.

Pair Trading with Regenxbio and Cardiff Oncology

The main advantage of trading using opposite Regenxbio and Cardiff Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regenxbio 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.

The idea behind Regenxbio and Cardiff Oncology 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.