Correlation Between MediciNova and Adagene
Can any of the company-specific risk be diversified away by investing in both MediciNova 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 MediciNova and Adagene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediciNova and Adagene, you can compare the effects of market volatilities on MediciNova 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 MediciNova with a short position of Adagene. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediciNova and Adagene.
Diversification Opportunities for MediciNova and Adagene
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MediciNova and Adagene is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding MediciNova and Adagene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adagene and MediciNova 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 MediciNova 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 MediciNova i.e., MediciNova and Adagene go up and down completely randomly.
Pair Corralation between MediciNova and Adagene
Given the investment horizon of 90 days MediciNova is expected to generate 0.9 times more return on investment than Adagene. However, MediciNova is 1.11 times less risky than Adagene. It trades about 0.05 of its potential returns per unit of risk. Adagene is currently generating about -0.01 per unit of risk. If you would invest 140.00 in MediciNova on November 3, 2024 and sell it today you would earn a total of 58.00 from holding MediciNova or generate 41.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediciNova vs. Adagene
Performance |
| Timeline |
| MediciNova |
| Adagene |
MediciNova and Adagene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediciNova and Adagene
The main advantage of trading using opposite MediciNova and Adagene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediciNova 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.| MediciNova vs. Aerovate Therapeutics | MediciNova vs. Adagene | MediciNova vs. Acrivon Therapeutics, Common | MediciNova vs. Rezolute |
| Adagene vs. Aerovate Therapeutics | Adagene vs. Acrivon Therapeutics, Common | Adagene vs. Rezolute | Adagene vs. AN2 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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