Correlation Between MediciNova and RepliCel Life
Can any of the company-specific risk be diversified away by investing in both MediciNova and RepliCel Life 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 RepliCel Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediciNova and RepliCel Life Sciences, you can compare the effects of market volatilities on MediciNova and RepliCel Life 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 RepliCel Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediciNova and RepliCel Life.
Diversification Opportunities for MediciNova and RepliCel Life
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between MediciNova and RepliCel is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding MediciNova and RepliCel Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RepliCel Life Sciences 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 RepliCel Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RepliCel Life Sciences has no effect on the direction of MediciNova i.e., MediciNova and RepliCel Life go up and down completely randomly.
Pair Corralation between MediciNova and RepliCel Life
Given the investment horizon of 90 days MediciNova is expected to generate 47.16 times less return on investment than RepliCel Life. But when comparing it to its historical volatility, MediciNova is 12.83 times less risky than RepliCel Life. It trades about 0.02 of its potential returns per unit of risk. RepliCel Life Sciences is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 18.00 in RepliCel Life Sciences on September 12, 2024 and sell it today you would lose (17.80) from holding RepliCel Life Sciences or give up 98.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediciNova vs. RepliCel Life Sciences
Performance |
| Timeline |
| MediciNova |
| RepliCel Life Sciences |
MediciNova and RepliCel Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediciNova and RepliCel Life
The main advantage of trading using opposite MediciNova and RepliCel Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediciNova position performs unexpectedly, RepliCel Life 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 RepliCel Life will offset losses from the drop in RepliCel Life's long position.| MediciNova vs. Aerovate Therapeutics | MediciNova vs. Adagene | MediciNova vs. Acrivon Therapeutics, Common | MediciNova vs. Rezolute |
| RepliCel Life vs. Vaxcyte | RepliCel Life vs. Larimar Therapeutics | RepliCel Life vs. Syndax Pharmaceuticals | RepliCel Life vs. Merus BV |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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