Correlation Between Vg Life and Biocardia

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

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

Diversification Opportunities for Vg Life and Biocardia

0.05

Correlation Coefficient

Vg Life  Biocardia

Significant diversification

The 3 months correlation between VGLS and Biocardia is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Vg Life Sciences and Biocardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biocardia and Vg Life 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 Vg Life Sciences 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 Vg Life i.e., Vg Life and Biocardia go up and down completely randomly.

Pair Corralation between Vg Life and Biocardia

Given the investment horizon of 90 days Vg Life Sciences is expected to generate 42.32 times more return on investment than Biocardia. However, Vg Life is 42.32 times more volatile than Biocardia. It trades about 0.2 of its potential returns per unit of risk. Biocardia is currently generating about 0.11 per unit of risk. If you would invest  0.00  in Vg Life Sciences on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Vg Life Sciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Vg Life Sciences  vs.  Biocardia

Vg Life Sciences

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vg Life Sciences are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile essential indicators, Vg Life unveiled solid returns over the last few months and may actually be approaching a breakup point.

Biocardia

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Biocardia are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, Biocardia sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vg Life and Biocardia

The main advantage of trading using opposite Vg Life and Biocardia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vg Life 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 Vg Life Sciences 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.