Correlation Between Benitec Biopharma and Capricor Therapeutics

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

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

Diversification Opportunities for Benitec Biopharma and Capricor Therapeutics

0.7

Correlation Coefficient

Benitec Biopharma  Capricor Therapeutics

Poor diversification

The 3 months correlation between Benitec and Capricor is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Benitec Biopharma Ltd and Capricor Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capricor Therapeutics and Benitec Biopharma 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 Benitec Biopharma Ltd 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 Benitec Biopharma i.e., Benitec Biopharma and Capricor Therapeutics go up and down completely randomly.

Pair Corralation between Benitec Biopharma and Capricor Therapeutics

Given the investment horizon of 90 days Benitec Biopharma Ltd is expected to generate 0.73 times more return on investment than Capricor Therapeutics. However, Benitec Biopharma Ltd is 1.37 times less risky than Capricor Therapeutics. It trades about 0.08 of its potential returns per unit of risk. Capricor Therapeutics is currently generating about 0.04 per unit of risk. If you would invest  276.00  in Benitec Biopharma Ltd on May 3, 2025 and sell it today you would earn a total of  820.00  from holding Benitec Biopharma Ltd or generate 297.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Benitec Biopharma Ltd  vs.  Capricor Therapeutics

Benitec Biopharma

Risk-Adjusted Performance

Very Weak

Over the last 90 days Benitec Biopharma Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Capricor Therapeutics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Capricor Therapeutics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Capricor Therapeutics may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Benitec Biopharma and Capricor Therapeutics

The main advantage of trading using opposite Benitec Biopharma and Capricor Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benitec Biopharma 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 Benitec Biopharma Ltd 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.