Correlation Between MediciNova and Entera Bio
Can any of the company-specific risk be diversified away by investing in both MediciNova and Entera Bio 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 Entera Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediciNova and Entera Bio, you can compare the effects of market volatilities on MediciNova and Entera Bio 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 Entera Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediciNova and Entera Bio.
Diversification Opportunities for MediciNova and Entera Bio
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MediciNova and Entera is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding MediciNova and Entera Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entera Bio 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 Entera Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entera Bio has no effect on the direction of MediciNova i.e., MediciNova and Entera Bio go up and down completely randomly.
Pair Corralation between MediciNova and Entera Bio
Given the investment horizon of 90 days MediciNova is expected to generate 1.36 times less return on investment than Entera Bio. But when comparing it to its historical volatility, MediciNova is 1.18 times less risky than Entera Bio. It trades about 0.19 of its potential returns per unit of risk. Entera Bio is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 178.00 in Entera Bio on September 15, 2024 and sell it today you would earn a total of 42.00 from holding Entera Bio or generate 23.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediciNova vs. Entera Bio
Performance |
| Timeline |
| MediciNova |
| Entera Bio |
MediciNova and Entera Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediciNova and Entera Bio
The main advantage of trading using opposite MediciNova and Entera Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediciNova position performs unexpectedly, Entera Bio 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 Entera Bio will offset losses from the drop in Entera Bio's long position.| MediciNova vs. Puma Biotechnology | MediciNova vs. Iovance Biotherapeutics | MediciNova vs. Day One Biopharmaceuticals | MediciNova vs. Inozyme Pharma |
| Entera Bio vs. Puma Biotechnology | Entera Bio vs. Iovance Biotherapeutics | Entera Bio vs. Day One Biopharmaceuticals | Entera Bio vs. Inozyme Pharma |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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