Correlation Between Navidea Biopharmaceutica and Capricor Therapeutics

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

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

Diversification Opportunities for Navidea Biopharmaceutica and Capricor Therapeutics

-0.83

Correlation Coefficient

Navidea Biopharmaceutica  Capricor Therapeutics

Pay attention - limited upside

The 3 months correlation between Navidea and Capricor is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Navidea Biopharmaceuticals and Capricor Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capricor Therapeutics and Navidea Biopharmaceutica 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 Navidea Biopharmaceuticals are associated (or correlated) with Capricor Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capricor Therapeutics has no effect on the direction of Navidea Biopharmaceutica i.e., Navidea Biopharmaceutica and Capricor Therapeutics go up and down completely randomly.

Pair Corralation between Navidea Biopharmaceutica and Capricor Therapeutics

If you would invest  437.00  in Capricor Therapeutics on August 31, 2024 and sell it today you would earn a total of  1,467  from holding Capricor Therapeutics or generate 335.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Navidea Biopharmaceuticals  vs.  Capricor Therapeutics

Navidea Biopharmaceutica

Risk-Adjusted Performance

0 of 100

Very Weak

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

Capricor Therapeutics

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Capricor Therapeutics are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Capricor Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Navidea Biopharmaceutica and Capricor Therapeutics

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

The idea behind Navidea Biopharmaceuticals and Capricor 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.