Correlation Between Brainstorm Cell and BiocardiaInc

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Can any of the company-specific risk be diversified away by investing in both Brainstorm Cell and BiocardiaInc 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 Brainstorm Cell and BiocardiaInc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brainstorm Cell Therapeutics and BiocardiaInc, you can compare the effects of market volatilities on Brainstorm Cell and BiocardiaInc 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 Brainstorm Cell with a short position of BiocardiaInc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brainstorm Cell and BiocardiaInc.

Diversification Opportunities for Brainstorm Cell and BiocardiaInc

-0.48
  Correlation Coefficient

Very good diversification

The 3 months correlation between Brainstorm and BiocardiaInc is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Brainstorm Cell Therapeutics and BiocardiaInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BiocardiaInc and Brainstorm Cell 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 Brainstorm Cell Therapeutics are associated (or correlated) with BiocardiaInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BiocardiaInc has no effect on the direction of Brainstorm Cell i.e., Brainstorm Cell and BiocardiaInc go up and down completely randomly.

Pair Corralation between Brainstorm Cell and BiocardiaInc

Given the investment horizon of 90 days Brainstorm Cell Therapeutics is expected to generate 0.91 times more return on investment than BiocardiaInc. However, Brainstorm Cell Therapeutics is 1.1 times less risky than BiocardiaInc. It trades about 0.0 of its potential returns per unit of risk. BiocardiaInc is currently generating about 0.0 per unit of risk. If you would invest  336.00  in Brainstorm Cell Therapeutics on December 30, 2023 and sell it today you would lose (280.00) from holding Brainstorm Cell Therapeutics or give up 83.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Brainstorm Cell Therapeutics  vs.  BiocardiaInc

 Performance 
       Timeline  
Brainstorm Cell Ther 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Brainstorm Cell Therapeutics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain essential indicators, Brainstorm Cell demonstrated solid returns over the last few months and may actually be approaching a breakup point.
BiocardiaInc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days BiocardiaInc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Brainstorm Cell and BiocardiaInc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Brainstorm Cell and BiocardiaInc

The main advantage of trading using opposite Brainstorm Cell and BiocardiaInc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brainstorm Cell position performs unexpectedly, BiocardiaInc 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 BiocardiaInc will offset losses from the drop in BiocardiaInc's long position.
The idea behind Brainstorm Cell Therapeutics and BiocardiaInc 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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