Correlation Between Curis and Baudax Bio

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

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

Diversification Opportunities for Curis and Baudax Bio

0.17

Correlation Coefficient

Curis  Baudax Bio

Average diversification

The 3 months correlation between Curis and Baudax is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Curis Inc and Baudax Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baudax Bio and Curis 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 Curis Inc are associated (or correlated) with Baudax Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baudax Bio has no effect on the direction of Curis i.e., Curis and Baudax Bio go up and down completely randomly.

Pair Corralation between Curis and Baudax Bio

Given the investment horizon of 90 days Curis Inc is expected to under-perform the Baudax Bio. But the stock apears to be less risky and, when comparing its historical volatility, Curis Inc is 3.8 times less risky than Baudax Bio. The stock trades about -0.03 of its potential returns per unit of risk. The Baudax Bio is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  58.00  in Baudax Bio on August 31, 2024 and sell it today you would earn a total of  18.00  from holding Baudax Bio or generate 31.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	8.56%
Values	Daily Returns

Curis Inc  vs.  Baudax Bio

Curis Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Curis Inc 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 forward indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Baudax Bio

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Curis and Baudax Bio

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

The idea behind Curis Inc and Baudax Bio 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.