Correlation Between Biomarin Pharmaceutical and MannKind Corp
Can any of the company-specific risk be diversified away by investing in both Biomarin Pharmaceutical and MannKind Corp 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 Biomarin Pharmaceutical and MannKind Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biomarin Pharmaceutical and MannKind Corp, you can compare the effects of market volatilities on Biomarin Pharmaceutical and MannKind Corp 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 Biomarin Pharmaceutical with a short position of MannKind Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biomarin Pharmaceutical and MannKind Corp.
Diversification Opportunities for Biomarin Pharmaceutical and MannKind Corp
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Biomarin and MannKind is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Biomarin Pharmaceutical and MannKind Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MannKind Corp and Biomarin Pharmaceutical 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 Biomarin Pharmaceutical are associated (or correlated) with MannKind Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MannKind Corp has no effect on the direction of Biomarin Pharmaceutical i.e., Biomarin Pharmaceutical and MannKind Corp go up and down completely randomly.
Pair Corralation between Biomarin Pharmaceutical and MannKind Corp
Given the investment horizon of 90 days Biomarin Pharmaceutical is expected to under-perform the MannKind Corp. But the stock apears to be less risky and, when comparing its historical volatility, Biomarin Pharmaceutical is 1.38 times less risky than MannKind Corp. The stock trades about -0.06 of its potential returns per unit of risk. The MannKind Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 334.00 in MannKind Corp on August 28, 2024 and sell it today you would earn a total of 338.00 from holding MannKind Corp or generate 101.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biomarin Pharmaceutical vs. MannKind Corp
Performance |
| Timeline |
| Biomarin Pharmaceutical |
| MannKind Corp |
Biomarin Pharmaceutical and MannKind Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biomarin Pharmaceutical and MannKind Corp
The main advantage of trading using opposite Biomarin Pharmaceutical and MannKind Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biomarin Pharmaceutical position performs unexpectedly, MannKind Corp 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 MannKind Corp will offset losses from the drop in MannKind Corp's long position.| Biomarin Pharmaceutical vs. Alnylam Pharmaceuticals | Biomarin Pharmaceutical vs. Exelixis | Biomarin Pharmaceutical vs. Halozyme Therapeutics | Biomarin Pharmaceutical vs. Arrowhead Pharmaceuticals |
| MannKind Corp vs. Biomarin Pharmaceutical | MannKind Corp vs. Vaxcyte | MannKind Corp vs. Liquidia Technologies | MannKind Corp vs. Legend Biotech 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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