Correlation Between Transcode Therapeutics and Biocardia

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

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

Diversification Opportunities for Transcode Therapeutics and Biocardia

-0.17

Correlation Coefficient

Transcode Therapeutics  Biocardia

Good diversification

The 3 months correlation between Transcode and Biocardia is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Transcode Therapeutics and Biocardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biocardia and Transcode 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 Transcode Therapeutics are associated (or correlated) with Biocardia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biocardia has no effect on the direction of Transcode Therapeutics i.e., Transcode Therapeutics and Biocardia go up and down completely randomly.

Pair Corralation between Transcode Therapeutics and Biocardia

Given the investment horizon of 90 days Transcode Therapeutics is expected to generate 0.82 times more return on investment than Biocardia. However, Transcode Therapeutics is 1.22 times less risky than Biocardia. It trades about -0.01 of its potential returns per unit of risk. Biocardia is currently generating about -0.07 per unit of risk. If you would invest  1,050  in Transcode Therapeutics on August 18, 2025 and sell it today you would lose (126.00) from holding Transcode Therapeutics or give up 12.0% of portfolio value over 90 days.

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

Transcode Therapeutics  vs.  Biocardia

Transcode Therapeutics

Risk-Adjusted Performance

Weakest

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

Biocardia

Risk-Adjusted Performance

Weakest

Over the last 90 days Biocardia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in December 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Transcode Therapeutics and Biocardia

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

The idea behind Transcode Therapeutics and Biocardia 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.