Correlation Between Adagene and MediciNova
Can any of the company-specific risk be diversified away by investing in both Adagene and MediciNova 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 Adagene and MediciNova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adagene and MediciNova, you can compare the effects of market volatilities on Adagene and MediciNova 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 Adagene with a short position of MediciNova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adagene and MediciNova.
Diversification Opportunities for Adagene and MediciNova
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Adagene and MediciNova is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Adagene and MediciNova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediciNova and Adagene 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 Adagene are associated (or correlated) with MediciNova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediciNova has no effect on the direction of Adagene i.e., Adagene and MediciNova go up and down completely randomly.
Pair Corralation between Adagene and MediciNova
Given the investment horizon of 90 days Adagene is expected to under-perform the MediciNova. But the stock apears to be less risky and, when comparing its historical volatility, Adagene is 1.11 times less risky than MediciNova. The stock trades about -0.05 of its potential returns per unit of risk. The MediciNova is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 165.00 in MediciNova on November 2, 2024 and sell it today you would earn a total of 40.00 from holding MediciNova or generate 24.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adagene vs. MediciNova
Performance |
| Timeline |
| Adagene |
| MediciNova |
Adagene and MediciNova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adagene and MediciNova
The main advantage of trading using opposite Adagene and MediciNova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adagene position performs unexpectedly, MediciNova 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 MediciNova will offset losses from the drop in MediciNova's long position.| Adagene vs. Aerovate Therapeutics | Adagene vs. Acrivon Therapeutics, Common | Adagene vs. Rezolute | Adagene vs. AN2 Therapeutics |
| MediciNova vs. Aerovate Therapeutics | MediciNova vs. Adagene | MediciNova vs. Acrivon Therapeutics, Common | MediciNova vs. Rezolute |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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