Correlation Between Assembly Biosciences and Miromatrix Medical

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

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

Diversification Opportunities for Assembly Biosciences and Miromatrix Medical

-0.2

Correlation Coefficient

Assembly Biosciences  Miromatrix Medical

Good diversification

The 3 months correlation between Assembly and Miromatrix is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Assembly Biosciences and Miromatrix Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miromatrix Medical and Assembly Biosciences 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 Assembly Biosciences are associated (or correlated) with Miromatrix Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miromatrix Medical has no effect on the direction of Assembly Biosciences i.e., Assembly Biosciences and Miromatrix Medical go up and down completely randomly.

Pair Corralation between Assembly Biosciences and Miromatrix Medical

Given the investment horizon of 90 days Assembly Biosciences is expected to generate 0.75 times more return on investment than Miromatrix Medical. However, Assembly Biosciences is 1.33 times less risky than Miromatrix Medical. It trades about 0.02 of its potential returns per unit of risk. Miromatrix Medical is currently generating about -0.02 per unit of risk. If you would invest  1,464  in Assembly Biosciences on September 16, 2024 and sell it today you would earn a total of  74.00  from holding Assembly Biosciences or generate 5.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	29.03%
Values	Daily Returns

Assembly Biosciences  vs.  Miromatrix Medical

Assembly Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Assembly Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Miromatrix Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Miromatrix Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Miromatrix Medical is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Assembly Biosciences and Miromatrix Medical

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

The idea behind Assembly Biosciences and Miromatrix Medical 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.