Correlation Between Miromatrix Medical and Protara Therapeutics

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

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

Diversification Opportunities for Miromatrix Medical and Protara Therapeutics

0.61

Correlation Coefficient

Miromatrix Medical  Protara Therapeutics

Poor diversification

The 3 months correlation between Miromatrix and Protara is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Miromatrix Medical and Protara Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protara Therapeutics and Miromatrix Medical 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 Miromatrix Medical are associated (or correlated) with Protara Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protara Therapeutics has no effect on the direction of Miromatrix Medical i.e., Miromatrix Medical and Protara Therapeutics go up and down completely randomly.

Pair Corralation between Miromatrix Medical and Protara Therapeutics

If you would invest  187.00  in Protara Therapeutics on September 16, 2024 and sell it today you would earn a total of  411.00  from holding Protara Therapeutics or generate 219.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.54%
Values	Daily Returns

Miromatrix Medical  vs.  Protara Therapeutics

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.

Protara Therapeutics

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Protara Therapeutics are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Protara Therapeutics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Miromatrix Medical and Protara Therapeutics

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

The idea behind Miromatrix Medical and Protara Therapeutics 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.