Correlation Between Cardiol Therapeutics and HLS Therapeutics

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

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

Diversification Opportunities for Cardiol Therapeutics and HLS Therapeutics

0.44

Correlation Coefficient

Cardiol Therapeutics  HLS Therapeutics

Very weak diversification

The 3 months correlation between Cardiol and HLS is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cardiol Therapeutics Class and HLS Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HLS Therapeutics and Cardiol Therapeutics 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 Cardiol Therapeutics Class are associated (or correlated) with HLS Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HLS Therapeutics has no effect on the direction of Cardiol Therapeutics i.e., Cardiol Therapeutics and HLS Therapeutics go up and down completely randomly.

Pair Corralation between Cardiol Therapeutics and HLS Therapeutics

Assuming the 90 days trading horizon Cardiol Therapeutics Class is expected to under-perform the HLS Therapeutics. In addition to that, Cardiol Therapeutics is 1.58 times more volatile than HLS Therapeutics. It trades about -0.06 of its total potential returns per unit of risk. HLS Therapeutics is currently generating about -0.03 per unit of volatility. If you would invest  525.00  in HLS Therapeutics on August 24, 2025 and sell it today you would lose (25.00) from holding HLS Therapeutics or give up 4.76% of portfolio value over 90 days.

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

Cardiol Therapeutics Class  vs.  HLS Therapeutics

Cardiol Therapeutics

Risk-Adjusted Performance

Weakest

Over the last 90 days Cardiol Therapeutics Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

HLS Therapeutics

Risk-Adjusted Performance

Weakest

Over the last 90 days HLS Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, HLS Therapeutics is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cardiol Therapeutics and HLS Therapeutics

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

The idea behind Cardiol Therapeutics Class and HLS 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.