Correlation Between Cleveland BioLabs and DiaMedica Therapeutics

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

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

Diversification Opportunities for Cleveland BioLabs and DiaMedica Therapeutics

0.0

Correlation Coefficient

Cleveland BioLabs  DiaMedica Therapeutics

Pay attention - limited upside

The 3 months correlation between Cleveland and DiaMedica is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cleveland BioLabs and DiaMedica Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DiaMedica Therapeutics and Cleveland BioLabs 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 Cleveland BioLabs are associated (or correlated) with DiaMedica Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DiaMedica Therapeutics has no effect on the direction of Cleveland BioLabs i.e., Cleveland BioLabs and DiaMedica Therapeutics go up and down completely randomly.

Pair Corralation between Cleveland BioLabs and DiaMedica Therapeutics

If you would invest  315.00  in DiaMedica Therapeutics on February 12, 2024 and sell it today you would lose (3.00) from holding DiaMedica Therapeutics or give up 0.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cleveland BioLabs  vs.  DiaMedica Therapeutics

Cleveland BioLabs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cleveland BioLabs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong essential indicators, Cleveland BioLabs is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

DiaMedica Therapeutics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DiaMedica Therapeutics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, DiaMedica Therapeutics is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cleveland BioLabs and DiaMedica Therapeutics

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

The idea behind Cleveland BioLabs and DiaMedica 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.