Correlation Between CHAR Technologies and Cardiol Therapeutics

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

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

Diversification Opportunities for CHAR Technologies and Cardiol Therapeutics

0.74

Correlation Coefficient

CHAR Technologies  Cardiol Therapeutics

Poor diversification

The 3 months correlation between CHAR and Cardiol is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding CHAR Technologies and Cardiol Therapeutics Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardiol Therapeutics and CHAR Technologies 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 CHAR Technologies 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 CHAR Technologies i.e., CHAR Technologies and Cardiol Therapeutics go up and down completely randomly.

Pair Corralation between CHAR Technologies and Cardiol Therapeutics

Assuming the 90 days horizon CHAR Technologies is expected to generate 1.59 times more return on investment than Cardiol Therapeutics. However, CHAR Technologies is 1.59 times more volatile than Cardiol Therapeutics Class. It trades about 0.09 of its potential returns per unit of risk. Cardiol Therapeutics Class is currently generating about 0.07 per unit of risk. If you would invest  20.00  in CHAR Technologies on April 23, 2025 and sell it today you would earn a total of  5.00  from holding CHAR Technologies or generate 25.0% return on investment over 90 days.

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

CHAR Technologies  vs.  Cardiol Therapeutics Class

CHAR Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CHAR Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, CHAR Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Cardiol Therapeutics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cardiol Therapeutics Class are ranked lower than 5 (%) 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 CHAR Technologies and Cardiol Therapeutics

The main advantage of trading using opposite CHAR Technologies and Cardiol Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHAR Technologies 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 CHAR Technologies 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.

Check out your portfolio center.

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.