Correlation Between Cue Biopharma and MediciNova
Can any of the company-specific risk be diversified away by investing in both Cue Biopharma 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 Cue Biopharma and MediciNova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cue Biopharma and MediciNova, you can compare the effects of market volatilities on Cue Biopharma 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 Cue Biopharma with a short position of MediciNova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cue Biopharma and MediciNova.
Diversification Opportunities for Cue Biopharma and MediciNova
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cue and MediciNova is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cue Biopharma and MediciNova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediciNova and Cue Biopharma 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 Cue Biopharma 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 Cue Biopharma i.e., Cue Biopharma and MediciNova go up and down completely randomly.
Pair Corralation between Cue Biopharma and MediciNova
Considering the 90-day investment horizon Cue Biopharma is expected to generate 21.45 times less return on investment than MediciNova. In addition to that, Cue Biopharma is 1.56 times more volatile than MediciNova. It trades about 0.0 of its total potential returns per unit of risk. MediciNova is currently generating about 0.08 per unit of volatility. If you would invest 132.00 in MediciNova on September 3, 2024 and sell it today you would earn a total of 75.00 from holding MediciNova or generate 56.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cue Biopharma vs. MediciNova
Performance |
| Timeline |
| Cue Biopharma |
| MediciNova |
Cue Biopharma and MediciNova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cue Biopharma and MediciNova
The main advantage of trading using opposite Cue Biopharma and MediciNova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cue Biopharma 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.| Cue Biopharma vs. DiaMedica Therapeutics | Cue Biopharma vs. Lyra Therapeutics | Cue Biopharma vs. Centessa Pharmaceuticals PLC |
| MediciNova vs. DiaMedica Therapeutics | MediciNova vs. Lyra Therapeutics | MediciNova vs. Centessa Pharmaceuticals PLC |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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