Correlation Between MediciNova and NextCure
Can any of the company-specific risk be diversified away by investing in both MediciNova and NextCure 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 NextCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediciNova and NextCure, you can compare the effects of market volatilities on MediciNova and NextCure 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 NextCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediciNova and NextCure.
Diversification Opportunities for MediciNova and NextCure
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MediciNova and NextCure is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding MediciNova and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure 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 NextCure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextCure has no effect on the direction of MediciNova i.e., MediciNova and NextCure go up and down completely randomly.
Pair Corralation between MediciNova and NextCure
Given the investment horizon of 90 days MediciNova is expected to generate 1.66 times more return on investment than NextCure. However, MediciNova is 1.66 times more volatile than NextCure. It trades about 0.19 of its potential returns per unit of risk. NextCure is currently generating about -0.37 per unit of risk. If you would invest 183.00 in MediciNova on September 15, 2024 and sell it today you would earn a total of 31.00 from holding MediciNova or generate 16.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediciNova vs. NextCure
Performance |
| Timeline |
| MediciNova |
| NextCure |
MediciNova and NextCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediciNova and NextCure
The main advantage of trading using opposite MediciNova and NextCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediciNova position performs unexpectedly, NextCure 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 NextCure will offset losses from the drop in NextCure's long position.| MediciNova vs. Puma Biotechnology | MediciNova vs. Iovance Biotherapeutics | MediciNova vs. Day One Biopharmaceuticals | MediciNova vs. Inozyme Pharma |
| NextCure vs. CytomX Therapeutics | NextCure vs. Spero Therapeutics | NextCure vs. Instil Bio | NextCure vs. Assembly Biosciences |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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