Correlation Between Amazon CDR and Medicenna Therapeutics
Can any of the company-specific risk be diversified away by investing in both Amazon CDR and Medicenna 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 Amazon CDR and Medicenna Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon CDR and Medicenna Therapeutics Corp, you can compare the effects of market volatilities on Amazon CDR and Medicenna 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 Amazon CDR with a short position of Medicenna Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon CDR and Medicenna Therapeutics.
Diversification Opportunities for Amazon CDR and Medicenna Therapeutics
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and Medicenna is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR and Medicenna Therapeutics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicenna Therapeutics and Amazon CDR 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 Amazon CDR are associated (or correlated) with Medicenna Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicenna Therapeutics has no effect on the direction of Amazon CDR i.e., Amazon CDR and Medicenna Therapeutics go up and down completely randomly.
Pair Corralation between Amazon CDR and Medicenna Therapeutics
Assuming the 90 days trading horizon Amazon CDR is expected to generate 0.32 times more return on investment than Medicenna Therapeutics. However, Amazon CDR is 3.14 times less risky than Medicenna Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Medicenna Therapeutics Corp is currently generating about -0.06 per unit of risk. If you would invest 2,314 in Amazon CDR on August 25, 2024 and sell it today you would earn a total of 37.00 from holding Amazon CDR or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon CDR vs. Medicenna Therapeutics Corp
Performance |
| Timeline |
| Amazon CDR |
| Medicenna Therapeutics |
Amazon CDR and Medicenna Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon CDR and Medicenna Therapeutics
The main advantage of trading using opposite Amazon CDR and Medicenna Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR position performs unexpectedly, Medicenna 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 Medicenna Therapeutics will offset losses from the drop in Medicenna Therapeutics' long position.| Amazon CDR vs. Ramp Metals | Amazon CDR vs. Gatos Silver | Amazon CDR vs. Sparx Technology | Amazon CDR vs. Ocumetics Technology Corp |
| Medicenna Therapeutics vs. Aptose Biosciences | Medicenna Therapeutics vs. Oncolytics Biotech | Medicenna Therapeutics vs. Helix BioPharma Corp |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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