Correlation Between MediciNova and HCW Biologics
Can any of the company-specific risk be diversified away by investing in both MediciNova and HCW Biologics 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 HCW Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediciNova and HCW Biologics, you can compare the effects of market volatilities on MediciNova and HCW Biologics 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 HCW Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediciNova and HCW Biologics.
Diversification Opportunities for MediciNova and HCW Biologics
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MediciNova and HCW is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding MediciNova and HCW Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCW Biologics 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 HCW Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCW Biologics has no effect on the direction of MediciNova i.e., MediciNova and HCW Biologics go up and down completely randomly.
Pair Corralation between MediciNova and HCW Biologics
Given the investment horizon of 90 days MediciNova is expected to generate 7.61 times less return on investment than HCW Biologics. But when comparing it to its historical volatility, MediciNova is 4.12 times less risky than HCW Biologics. It trades about 0.01 of its potential returns per unit of risk. HCW Biologics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 216.00 in HCW Biologics on August 28, 2024 and sell it today you would lose (155.00) from holding HCW Biologics or give up 71.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediciNova vs. HCW Biologics
Performance |
| Timeline |
| MediciNova |
| HCW Biologics |
MediciNova and HCW Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediciNova and HCW Biologics
The main advantage of trading using opposite MediciNova and HCW Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediciNova position performs unexpectedly, HCW Biologics 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 HCW Biologics will offset losses from the drop in HCW Biologics' long position.| MediciNova vs. Eliem Therapeutics | MediciNova vs. HCW Biologics | MediciNova vs. Scpharmaceuticals | MediciNova vs. Milestone Pharmaceuticals |
| HCW Biologics vs. Eliem Therapeutics | HCW Biologics vs. Scpharmaceuticals | HCW Biologics vs. Milestone Pharmaceuticals | HCW Biologics vs. Seres 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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