Correlation Between Windtree Therapeutics and Cardio Diagnostics

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

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

Diversification Opportunities for Windtree Therapeutics and Cardio Diagnostics

0.44

Correlation Coefficient

Windtree Therapeutics  Cardio Diagnostics

Very weak diversification

The 3 months correlation between Windtree and Cardio is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Windtree Therapeutics and Cardio Diagnostics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardio Diagnostics and Windtree Therapeutics 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 Windtree Therapeutics are associated (or correlated) with Cardio Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardio Diagnostics has no effect on the direction of Windtree Therapeutics i.e., Windtree Therapeutics and Cardio Diagnostics go up and down completely randomly.

Pair Corralation between Windtree Therapeutics and Cardio Diagnostics

Given the investment horizon of 90 days Windtree Therapeutics is expected to under-perform the Cardio Diagnostics. In addition to that, Windtree Therapeutics is 1.13 times more volatile than Cardio Diagnostics Holdings. It trades about -0.33 of its total potential returns per unit of risk. Cardio Diagnostics Holdings is currently generating about -0.11 per unit of volatility. If you would invest  82.00  in Cardio Diagnostics Holdings on December 29, 2024 and sell it today you would lose (44.00) from holding Cardio Diagnostics Holdings or give up 53.66% of portfolio value over 90 days.

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

Windtree Therapeutics  vs.  Cardio Diagnostics Holdings

Windtree Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Windtree Therapeutics 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 comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Cardio Diagnostics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cardio Diagnostics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Windtree Therapeutics and Cardio Diagnostics

The main advantage of trading using opposite Windtree Therapeutics and Cardio Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Windtree Therapeutics position performs unexpectedly, Cardio Diagnostics 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 Cardio Diagnostics will offset losses from the drop in Cardio Diagnostics' long position.

The idea behind Windtree Therapeutics and Cardio Diagnostics Holdings 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.