Correlation Between MediciNova and Graphite Bio
Can any of the company-specific risk be diversified away by investing in both MediciNova and Graphite 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 Graphite Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediciNova and Graphite Bio, you can compare the effects of market volatilities on MediciNova and Graphite 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 Graphite Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediciNova and Graphite Bio.
Diversification Opportunities for MediciNova and Graphite Bio
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MediciNova and Graphite is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding MediciNova and Graphite Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphite 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 Graphite Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphite Bio has no effect on the direction of MediciNova i.e., MediciNova and Graphite Bio go up and down completely randomly.
Pair Corralation between MediciNova and Graphite Bio
Given the investment horizon of 90 days MediciNova is expected to generate 1.83 times more return on investment than Graphite Bio. However, MediciNova is 1.83 times more volatile than Graphite Bio. It trades about 0.02 of its potential returns per unit of risk. Graphite Bio is currently generating about -0.07 per unit of risk. If you would invest 215.00 in MediciNova on September 1, 2024 and sell it today you would lose (8.00) from holding MediciNova or give up 3.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 8.33% |
| Values | Daily Returns |
MediciNova vs. Graphite Bio
Performance |
| Timeline |
| MediciNova |
| Graphite Bio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MediciNova and Graphite Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediciNova and Graphite Bio
The main advantage of trading using opposite MediciNova and Graphite Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediciNova position performs unexpectedly, Graphite 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 Graphite Bio will offset losses from the drop in Graphite Bio's long position.| MediciNova vs. Cue Biopharma | MediciNova vs. Tff Pharmaceuticals | MediciNova vs. Lantern Pharma | MediciNova vs. Eliem Therapeutics |
| Graphite Bio vs. Assembly Biosciences | Graphite Bio vs. Instil Bio | Graphite Bio vs. Nuvation Bio | Graphite Bio vs. Achilles Therapeutics PLC |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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