Correlation Between Biocardia and Aptorum Group

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

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

Diversification Opportunities for Biocardia and Aptorum Group

0.57

Correlation Coefficient

Biocardia  Aptorum Group

Very weak diversification

The 3 months correlation between Biocardia and Aptorum is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Biocardia and Aptorum Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptorum Group and Biocardia 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 Biocardia are associated (or correlated) with Aptorum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptorum Group has no effect on the direction of Biocardia i.e., Biocardia and Aptorum Group go up and down completely randomly.

Pair Corralation between Biocardia and Aptorum Group

Given the investment horizon of 90 days Biocardia is expected to generate 0.67 times more return on investment than Aptorum Group. However, Biocardia is 1.49 times less risky than Aptorum Group. It trades about -0.04 of its potential returns per unit of risk. Aptorum Group Ltd is currently generating about -0.25 per unit of risk. If you would invest  287.00  in Biocardia on September 3, 2024 and sell it today you would lose (59.00) from holding Biocardia or give up 20.56% of portfolio value over 90 days.

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

Biocardia  vs.  Aptorum Group Ltd

Biocardia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biocardia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Aptorum Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aptorum Group Ltd 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 basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Biocardia and Aptorum Group

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

The idea behind Biocardia and Aptorum Group Ltd 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.