Correlation Between Harmony Biosciences and MediciNova
Can any of the company-specific risk be diversified away by investing in both Harmony Biosciences 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 Harmony Biosciences and MediciNova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harmony Biosciences Holdings and MediciNova, you can compare the effects of market volatilities on Harmony Biosciences 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 Harmony Biosciences with a short position of MediciNova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Biosciences and MediciNova.
Diversification Opportunities for Harmony Biosciences and MediciNova
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harmony and MediciNova is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Biosciences Holdings and MediciNova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediciNova and Harmony Biosciences 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 Harmony Biosciences Holdings 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 Harmony Biosciences i.e., Harmony Biosciences and MediciNova go up and down completely randomly.
Pair Corralation between Harmony Biosciences and MediciNova
Given the investment horizon of 90 days Harmony Biosciences is expected to generate 51.68 times less return on investment than MediciNova. But when comparing it to its historical volatility, Harmony Biosciences Holdings is 2.0 times less risky than MediciNova. It trades about 0.01 of its potential returns per unit of risk. MediciNova is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 163.00 in MediciNova on August 28, 2024 and sell it today you would earn a total of 42.00 from holding MediciNova or generate 25.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harmony Biosciences Holdings vs. MediciNova
Performance |
| Timeline |
| Harmony Biosciences |
| MediciNova |
Harmony Biosciences and MediciNova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harmony Biosciences and MediciNova
The main advantage of trading using opposite Harmony Biosciences and MediciNova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Biosciences 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.| Harmony Biosciences vs. Keros Therapeutics | Harmony Biosciences vs. Janux Therapeutics | Harmony Biosciences vs. Fennec Pharmaceuticals | Harmony Biosciences vs. Edgewise Therapeutics |
| MediciNova vs. Aerovate Therapeutics | MediciNova vs. Adagene | MediciNova vs. Acrivon Therapeutics, Common | MediciNova vs. Rezolute |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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