Correlation Between MediciNova and Amgen
Can any of the company-specific risk be diversified away by investing in both MediciNova and Amgen 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 Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediciNova and Amgen Inc, you can compare the effects of market volatilities on MediciNova and Amgen 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 Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediciNova and Amgen.
Diversification Opportunities for MediciNova and Amgen
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MediciNova and Amgen is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding MediciNova and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc 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 Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of MediciNova i.e., MediciNova and Amgen go up and down completely randomly.
Pair Corralation between MediciNova and Amgen
Given the investment horizon of 90 days MediciNova is expected to generate 5.08 times more return on investment than Amgen. However, MediciNova is 5.08 times more volatile than Amgen Inc. It trades about 0.13 of its potential returns per unit of risk. Amgen Inc is currently generating about -0.22 per unit of risk. If you would invest 163.00 in MediciNova on August 29, 2024 and sell it today you would earn a total of 41.00 from holding MediciNova or generate 25.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediciNova vs. Amgen Inc
Performance |
| Timeline |
| MediciNova |
| Amgen Inc |
MediciNova and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediciNova and Amgen
The main advantage of trading using opposite MediciNova and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediciNova position performs unexpectedly, Amgen 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 Amgen will offset losses from the drop in Amgen's long position.| MediciNova vs. Bright Minds Biosciences | MediciNova vs. HP Inc | MediciNova vs. Intel | MediciNova vs. Chevron Corp |
| Amgen vs. Pharvaris BV | Amgen vs. Brinker International | Amgen vs. Alcoa Corp | Amgen vs. Direxion Daily FTSE |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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