Correlation Between Xenetic Biosciences and BioCardia

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

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

Diversification Opportunities for Xenetic Biosciences and BioCardia

-0.6

Correlation Coefficient

Xenetic Biosciences  BioCardia

Excellent diversification

The 3 months correlation between Xenetic and BioCardia is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Xenetic Biosciences and BioCardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioCardia and Xenetic Biosciences 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 Xenetic Biosciences are associated (or correlated) with BioCardia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioCardia has no effect on the direction of Xenetic Biosciences i.e., Xenetic Biosciences and BioCardia go up and down completely randomly.

Pair Corralation between Xenetic Biosciences and BioCardia

If you would invest (100.00) in BioCardia on September 3, 2024 and sell it today you would earn a total of  100.00  from holding BioCardia or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

Xenetic Biosciences  vs.  BioCardia

Xenetic Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xenetic Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Xenetic Biosciences is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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. In spite of fairly stable basic indicators, BioCardia is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Xenetic Biosciences and BioCardia

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

The idea behind Xenetic Biosciences and BioCardia 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.