Correlation Between MediciNova and Vg Life
Can any of the company-specific risk be diversified away by investing in both MediciNova and Vg 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 Vg Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediciNova and Vg Life Sciences, you can compare the effects of market volatilities on MediciNova and Vg 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 Vg Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediciNova and Vg Life.
Diversification Opportunities for MediciNova and Vg Life
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between MediciNova and VGLS is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding MediciNova and Vg Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vg 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 Vg Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vg Life Sciences has no effect on the direction of MediciNova i.e., MediciNova and Vg Life go up and down completely randomly.
Pair Corralation between MediciNova and Vg Life
Given the investment horizon of 90 days MediciNova is expected to generate 20.64 times less return on investment than Vg Life. But when comparing it to its historical volatility, MediciNova is 18.21 times less risky than Vg Life. It trades about 0.17 of its potential returns per unit of risk. Vg Life Sciences is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Vg Life Sciences on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Vg Life Sciences or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediciNova vs. Vg Life Sciences
Performance |
| Timeline |
| MediciNova |
| Vg Life Sciences |
MediciNova and Vg Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediciNova and Vg Life
The main advantage of trading using opposite MediciNova and Vg Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediciNova position performs unexpectedly, Vg 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 Vg Life will offset losses from the drop in Vg Life's long position.| MediciNova vs. Aerovate Therapeutics | MediciNova vs. Adagene | MediciNova vs. Acrivon Therapeutics, Common | MediciNova vs. Rezolute |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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