Correlation Between Dexterra and Cardiol Therapeutics

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

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

Diversification Opportunities for Dexterra and Cardiol Therapeutics

0.7

Correlation Coefficient

Dexterra  Cardiol Therapeutics

Poor diversification

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

Pair Corralation between Dexterra and Cardiol Therapeutics

Assuming the 90 days trading horizon Dexterra is expected to generate 5.8 times less return on investment than Cardiol Therapeutics. But when comparing it to its historical volatility, Dexterra Group is 3.29 times less risky than Cardiol Therapeutics. It trades about 0.1 of its potential returns per unit of risk. Cardiol Therapeutics Class is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  155.00  in Cardiol Therapeutics Class on March 21, 2025 and sell it today you would earn a total of  24.00  from holding Cardiol Therapeutics Class or generate 15.48% return on investment over 90 days.

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

Dexterra Group  vs.  Cardiol Therapeutics Class

Dexterra Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dexterra Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dexterra displayed solid returns over the last few months and may actually be approaching a breakup point.

Cardiol Therapeutics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cardiol Therapeutics Class are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Cardiol Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dexterra and Cardiol Therapeutics

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

The idea behind Dexterra Group and Cardiol Therapeutics Class 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..