Correlation Between Biocardia and Banzai International

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

By analyzing existing cross correlation between Biocardia and Banzai International, you can compare the effects of market volatilities on Biocardia and Banzai International 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 Banzai International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biocardia and Banzai International.

Diversification Opportunities for Biocardia and Banzai International

0.18

Correlation Coefficient

Biocardia  Banzai International

Average diversification

The 3 months correlation between Biocardia and Banzai is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Biocardia and Banzai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banzai International 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 Banzai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banzai International has no effect on the direction of Biocardia i.e., Biocardia and Banzai International go up and down completely randomly.

Pair Corralation between Biocardia and Banzai International

Given the investment horizon of 90 days Biocardia is expected to under-perform the Banzai International. But the stock apears to be less risky and, when comparing its historical volatility, Biocardia is 4.35 times less risky than Banzai International. The stock trades about -0.05 of its potential returns per unit of risk. The Banzai International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1.29  in Banzai International on September 23, 2024 and sell it today you would lose (0.33) from holding Banzai International or give up 25.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	66.15%
Values	Daily Returns

Biocardia  vs.  Banzai International

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.

Banzai International

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Banzai International are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward indicators, Banzai International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Biocardia and Banzai International

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

The idea behind Biocardia and Banzai International 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.