Correlation Between MediciNova and Longboard Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both MediciNova and Longboard Pharmaceuticals 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 Longboard Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediciNova and Longboard Pharmaceuticals, you can compare the effects of market volatilities on MediciNova and Longboard Pharmaceuticals 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 Longboard Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediciNova and Longboard Pharmaceuticals.
Diversification Opportunities for MediciNova and Longboard Pharmaceuticals
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between MediciNova and Longboard is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding MediciNova and Longboard Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longboard Pharmaceuticals 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 Longboard Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longboard Pharmaceuticals has no effect on the direction of MediciNova i.e., MediciNova and Longboard Pharmaceuticals go up and down completely randomly.
Pair Corralation between MediciNova and Longboard Pharmaceuticals
Given the investment horizon of 90 days MediciNova is expected to generate 81.37 times more return on investment than Longboard Pharmaceuticals. However, MediciNova is 81.37 times more volatile than Longboard Pharmaceuticals. It trades about 0.14 of its potential returns per unit of risk. Longboard Pharmaceuticals is currently generating about 0.13 per unit of risk. If you would invest 163.00 in MediciNova on August 27, 2024 and sell it today you would earn a total of 42.00 from holding MediciNova or generate 25.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediciNova vs. Longboard Pharmaceuticals
Performance |
| Timeline |
| MediciNova |
| Longboard Pharmaceuticals |
MediciNova and Longboard Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediciNova and Longboard Pharmaceuticals
The main advantage of trading using opposite MediciNova and Longboard Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediciNova position performs unexpectedly, Longboard Pharmaceuticals 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 Longboard Pharmaceuticals will offset losses from the drop in Longboard Pharmaceuticals' long position.| MediciNova vs. Aerovate Therapeutics | MediciNova vs. Adagene | MediciNova vs. Acrivon Therapeutics, Common | MediciNova vs. Rezolute |
| Longboard Pharmaceuticals vs. Molecular Partners AG | Longboard Pharmaceuticals vs. MediciNova | Longboard Pharmaceuticals vs. Anebulo Pharmaceuticals | Longboard Pharmaceuticals vs. Champions Oncology |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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