Correlation Between Mustang Bio and ProMIS Neurosciences
Can any of the company-specific risk be diversified away by investing in both Mustang Bio and ProMIS Neurosciences 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 Mustang Bio and ProMIS Neurosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mustang Bio and ProMIS Neurosciences, you can compare the effects of market volatilities on Mustang Bio and ProMIS Neurosciences 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 Mustang Bio with a short position of ProMIS Neurosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mustang Bio and ProMIS Neurosciences.
Diversification Opportunities for Mustang Bio and ProMIS Neurosciences
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mustang and ProMIS is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Mustang Bio and ProMIS Neurosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProMIS Neurosciences and Mustang Bio 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 Mustang Bio are associated (or correlated) with ProMIS Neurosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProMIS Neurosciences has no effect on the direction of Mustang Bio i.e., Mustang Bio and ProMIS Neurosciences go up and down completely randomly.
Pair Corralation between Mustang Bio and ProMIS Neurosciences
Given the investment horizon of 90 days Mustang Bio is expected to under-perform the ProMIS Neurosciences. In addition to that, Mustang Bio is 2.71 times more volatile than ProMIS Neurosciences. It trades about -0.01 of its total potential returns per unit of risk. ProMIS Neurosciences is currently generating about -0.01 per unit of volatility. If you would invest 477.00 in ProMIS Neurosciences on December 2, 2024 and sell it today you would lose (406.00) from holding ProMIS Neurosciences or give up 85.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mustang Bio vs. ProMIS Neurosciences
Performance |
| Timeline |
| Mustang Bio |
| ProMIS Neurosciences |
Mustang Bio and ProMIS Neurosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mustang Bio and ProMIS Neurosciences
The main advantage of trading using opposite Mustang Bio and ProMIS Neurosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mustang Bio position performs unexpectedly, ProMIS Neurosciences 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 ProMIS Neurosciences will offset losses from the drop in ProMIS Neurosciences' long position.| Mustang Bio vs. Checkpoint Therapeutics | ||
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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