Correlation Between MoonLake Immunotherapeuti and Adagene
Can any of the company-specific risk be diversified away by investing in both MoonLake Immunotherapeuti and Adagene 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 MoonLake Immunotherapeuti and Adagene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MoonLake Immunotherapeutics and Adagene, you can compare the effects of market volatilities on MoonLake Immunotherapeuti and Adagene 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 MoonLake Immunotherapeuti with a short position of Adagene. Check out your portfolio center. Please also check ongoing floating volatility patterns of MoonLake Immunotherapeuti and Adagene.
Diversification Opportunities for MoonLake Immunotherapeuti and Adagene
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MoonLake and Adagene is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding MoonLake Immunotherapeutics and Adagene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adagene and MoonLake Immunotherapeuti 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 MoonLake Immunotherapeutics are associated (or correlated) with Adagene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adagene has no effect on the direction of MoonLake Immunotherapeuti i.e., MoonLake Immunotherapeuti and Adagene go up and down completely randomly.
Pair Corralation between MoonLake Immunotherapeuti and Adagene
Given the investment horizon of 90 days MoonLake Immunotherapeutics is expected to generate 0.62 times more return on investment than Adagene. However, MoonLake Immunotherapeutics is 1.62 times less risky than Adagene. It trades about 0.15 of its potential returns per unit of risk. Adagene is currently generating about -0.23 per unit of risk. If you would invest 4,805 in MoonLake Immunotherapeutics on August 29, 2024 and sell it today you would earn a total of 479.00 from holding MoonLake Immunotherapeutics or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MoonLake Immunotherapeutics vs. Adagene
Performance |
| Timeline |
| MoonLake Immunotherapeuti |
| Adagene |
MoonLake Immunotherapeuti and Adagene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MoonLake Immunotherapeuti and Adagene
The main advantage of trading using opposite MoonLake Immunotherapeuti and Adagene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MoonLake Immunotherapeuti position performs unexpectedly, Adagene 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 Adagene will offset losses from the drop in Adagene's long position.The idea behind MoonLake Immunotherapeutics and Adagene pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stocks Directory module to find actively traded stocks across global markets.
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