Correlation Between Edesa Biotech and MiMedx
Can any of the company-specific risk be diversified away by investing in both Edesa Biotech 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 Edesa Biotech and MiMedx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edesa Biotech and MiMedx Group, you can compare the effects of market volatilities on Edesa Biotech 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 Edesa Biotech with a short position of MiMedx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edesa Biotech and MiMedx.
Diversification Opportunities for Edesa Biotech and MiMedx
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Edesa and MiMedx is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Edesa Biotech and MiMedx Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MiMedx Group and Edesa Biotech 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 Edesa Biotech 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 Edesa Biotech i.e., Edesa Biotech and MiMedx go up and down completely randomly.
Pair Corralation between Edesa Biotech and MiMedx
Given the investment horizon of 90 days Edesa Biotech is expected to generate 4.05 times more return on investment than MiMedx. However, Edesa Biotech is 4.05 times more volatile than MiMedx Group. It trades about 0.11 of its potential returns per unit of risk. MiMedx Group is currently generating about -0.19 per unit of risk. If you would invest 168.00 in Edesa Biotech on November 1, 2024 and sell it today you would earn a total of 21.00 from holding Edesa Biotech or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edesa Biotech vs. MiMedx Group
Performance |
| Timeline |
| Edesa Biotech |
| MiMedx Group |
Edesa Biotech and MiMedx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edesa Biotech and MiMedx
The main advantage of trading using opposite Edesa Biotech and MiMedx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edesa Biotech 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.| Edesa Biotech vs. SAB Biotherapeutics | Edesa Biotech vs. Senti Biosciences | Edesa Biotech vs. Cingulate | Edesa Biotech vs. Indaptus Therapeutics |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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