Correlation Between Heat Biologics and Brickell Biotech

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

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

Diversification Opportunities for Heat Biologics and Brickell Biotech

0.0

Correlation Coefficient

Heat Biologics  Brickell Biotech

Pay attention - limited upside

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

Pair Corralation between Heat Biologics and Brickell Biotech

If you would invest (100.00) in Heat Biologics on January 20, 2024 and sell it today you would earn a total of  100.00  from holding Heat Biologics or generate -100.0% return on investment over 90 days.

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

Heat Biologics  vs.  Brickell Biotech

Heat Biologics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heat Biologics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, Heat Biologics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Brickell Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brickell Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Heat Biologics and Brickell Biotech

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

The idea behind Heat Biologics and Brickell Biotech 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..