Correlation Between Cardio Diagnostics and Windtree Therapeutics

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

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

Diversification Opportunities for Cardio Diagnostics and Windtree Therapeutics

0.7

Correlation Coefficient

Cardio Diagnostics  Windtree Therapeutics

Poor diversification

The 3 months correlation between Cardio and Windtree is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cardio Diagnostics Holdings and Windtree Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Windtree Therapeutics and Cardio Diagnostics 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 Cardio Diagnostics Holdings are associated (or correlated) with Windtree Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Windtree Therapeutics has no effect on the direction of Cardio Diagnostics i.e., Cardio Diagnostics and Windtree Therapeutics go up and down completely randomly.

Pair Corralation between Cardio Diagnostics and Windtree Therapeutics

Given the investment horizon of 90 days Cardio Diagnostics Holdings is expected to under-perform the Windtree Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Cardio Diagnostics Holdings is 1.32 times less risky than Windtree Therapeutics. The stock trades about -0.15 of its potential returns per unit of risk. The Windtree Therapeutics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  121.00  in Windtree Therapeutics on April 25, 2025 and sell it today you would lose (19.00) from holding Windtree Therapeutics or give up 15.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Cardio Diagnostics Holdings  vs.  Windtree Therapeutics

Cardio Diagnostics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cardio Diagnostics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Windtree Therapeutics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Windtree Therapeutics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Windtree Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cardio Diagnostics and Windtree Therapeutics

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

The idea behind Cardio Diagnostics Holdings and Windtree 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.