Correlation Between Surrozen and Biocardia

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Can any of the company-specific risk be diversified away by investing in both Surrozen 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 Surrozen and Biocardia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surrozen and Biocardia, you can compare the effects of market volatilities on Surrozen 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 Surrozen with a short position of Biocardia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surrozen and Biocardia.

Diversification Opportunities for Surrozen and Biocardia

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Surrozen and Biocardia is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Surrozen and Biocardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biocardia and Surrozen 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 Surrozen 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 Surrozen i.e., Surrozen and Biocardia go up and down completely randomly.

Pair Corralation between Surrozen and Biocardia

Given the investment horizon of 90 days Surrozen is expected to generate 1.55 times more return on investment than Biocardia. However, Surrozen is 1.55 times more volatile than Biocardia. It trades about 0.06 of its potential returns per unit of risk. Biocardia is currently generating about -0.01 per unit of risk. If you would invest  1,181  in Surrozen on October 9, 2024 and sell it today you would earn a total of  114.00  from holding Surrozen or generate 9.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Surrozen  vs.  Biocardia

 Performance 
       Timeline  
Surrozen 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Surrozen are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Surrozen displayed solid returns over the last few months and may actually be approaching a breakup point.
Biocardia 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Biocardia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Biocardia is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Surrozen and Biocardia Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Surrozen and Biocardia

The main advantage of trading using opposite Surrozen and Biocardia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surrozen 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 Surrozen 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.
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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