Correlation Between Design Therapeutics and MiMedx
Can any of the company-specific risk be diversified away by investing in both Design Therapeutics and MiMedx 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 Design Therapeutics and MiMedx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Design Therapeutics and MiMedx Group, you can compare the effects of market volatilities on Design Therapeutics and MiMedx 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 Design Therapeutics with a short position of MiMedx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Design Therapeutics and MiMedx.
Diversification Opportunities for Design Therapeutics and MiMedx
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Design and MiMedx is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Design Therapeutics and MiMedx Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MiMedx Group and Design Therapeutics 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 Design Therapeutics are associated (or correlated) with MiMedx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MiMedx Group has no effect on the direction of Design Therapeutics i.e., Design Therapeutics and MiMedx go up and down completely randomly.
Pair Corralation between Design Therapeutics and MiMedx
Given the investment horizon of 90 days Design Therapeutics is expected to generate 1.13 times less return on investment than MiMedx. In addition to that, Design Therapeutics is 1.31 times more volatile than MiMedx Group. It trades about 0.09 of its total potential returns per unit of risk. MiMedx Group is currently generating about 0.14 per unit of volatility. If you would invest 684.00 in MiMedx Group on August 30, 2024 and sell it today you would earn a total of 259.00 from holding MiMedx Group or generate 37.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Design Therapeutics vs. MiMedx Group
Performance |
| Timeline |
| Design Therapeutics |
| MiMedx Group |
Design Therapeutics and MiMedx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Design Therapeutics and MiMedx
The main advantage of trading using opposite Design Therapeutics and MiMedx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Design Therapeutics position performs unexpectedly, MiMedx 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 MiMedx will offset losses from the drop in MiMedx's long position.| Design Therapeutics vs. In8bio Inc | Design Therapeutics vs. Cue Biopharma | Design Therapeutics vs. Tff Pharmaceuticals | Design Therapeutics vs. Lantern Pharma |
| MiMedx vs. Monte Rosa Therapeutics | MiMedx vs. Design Therapeutics | MiMedx vs. Werewolf Therapeutics | MiMedx vs. Ikena Oncology |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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