Correlation Between Magenta Therapeutics and MediciNova
Can any of the company-specific risk be diversified away by investing in both Magenta Therapeutics 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 Magenta Therapeutics and MediciNova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magenta Therapeutics and MediciNova, you can compare the effects of market volatilities on Magenta Therapeutics 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 Magenta Therapeutics with a short position of MediciNova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magenta Therapeutics and MediciNova.
Diversification Opportunities for Magenta Therapeutics and MediciNova
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magenta and MediciNova is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Magenta Therapeutics and MediciNova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediciNova and Magenta 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 Magenta Therapeutics 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 Magenta Therapeutics i.e., Magenta Therapeutics and MediciNova go up and down completely randomly.
Pair Corralation between Magenta Therapeutics and MediciNova
Given the investment horizon of 90 days Magenta Therapeutics is expected to generate 0.62 times more return on investment than MediciNova. However, Magenta Therapeutics is 1.62 times less risky than MediciNova. It trades about 0.2 of its potential returns per unit of risk. MediciNova is currently generating about 0.02 per unit of risk. If you would invest 70.00 in Magenta Therapeutics on September 1, 2024 and sell it today you would earn a total of 12.00 from holding Magenta Therapeutics or generate 17.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.33% |
| Values | Daily Returns |
Magenta Therapeutics vs. MediciNova
Performance |
| Timeline |
| Magenta Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| MediciNova |
Magenta Therapeutics and MediciNova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magenta Therapeutics and MediciNova
The main advantage of trading using opposite Magenta Therapeutics and MediciNova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magenta Therapeutics 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.| Magenta Therapeutics vs. Assembly Biosciences | Magenta Therapeutics vs. Instil Bio | Magenta Therapeutics vs. Nuvation Bio | Magenta Therapeutics vs. Achilles Therapeutics PLC |
| MediciNova vs. Cue Biopharma | MediciNova vs. Tff Pharmaceuticals | MediciNova vs. Lantern Pharma | MediciNova vs. Eliem Therapeutics |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |