Correlation Between Transgene and BioCardia

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

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

Diversification Opportunities for Transgene and BioCardia

0.0

Correlation Coefficient

Transgene  BioCardia

Pay attention - limited upside

The 3 months correlation between Transgene and BioCardia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Transgene SA and BioCardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioCardia and Transgene 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 Transgene SA 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 Transgene i.e., Transgene and BioCardia go up and down completely randomly.

Pair Corralation between Transgene and BioCardia

If you would invest  1.00  in Transgene SA on December 2, 2024 and sell it today you would earn a total of  158.00  from holding Transgene SA or generate 15800.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Transgene SA  vs.  BioCardia

Transgene SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Transgene SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Transgene is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

BioCardia

Risk-Adjusted Performance

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 Transgene and BioCardia

The main advantage of trading using opposite Transgene and BioCardia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transgene 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 Transgene SA 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.