Correlation Between MediciNova and Vir Biotechnology
Can any of the company-specific risk be diversified away by investing in both MediciNova and Vir Biotechnology 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 Vir Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediciNova and Vir Biotechnology, you can compare the effects of market volatilities on MediciNova and Vir Biotechnology 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 Vir Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediciNova and Vir Biotechnology.
Diversification Opportunities for MediciNova and Vir Biotechnology
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MediciNova and Vir is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding MediciNova and Vir Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vir Biotechnology 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 Vir Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vir Biotechnology has no effect on the direction of MediciNova i.e., MediciNova and Vir Biotechnology go up and down completely randomly.
Pair Corralation between MediciNova and Vir Biotechnology
Given the investment horizon of 90 days MediciNova is expected to generate 1.52 times more return on investment than Vir Biotechnology. However, MediciNova is 1.52 times more volatile than Vir Biotechnology. It trades about 0.07 of its potential returns per unit of risk. Vir Biotechnology is currently generating about -0.04 per unit of risk. If you would invest 147.00 in MediciNova on September 1, 2024 and sell it today you would earn a total of 60.00 from holding MediciNova or generate 40.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediciNova vs. Vir Biotechnology
Performance |
| Timeline |
| MediciNova |
| Vir Biotechnology |
MediciNova and Vir Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediciNova and Vir Biotechnology
The main advantage of trading using opposite MediciNova and Vir Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediciNova position performs unexpectedly, Vir Biotechnology 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 Vir Biotechnology will offset losses from the drop in Vir Biotechnology's long position.| MediciNova vs. Tff Pharmaceuticals | MediciNova vs. Eliem Therapeutics | MediciNova vs. Inhibrx | MediciNova vs. Enliven Therapeutics |
| Vir Biotechnology vs. CureVac NV | Vir Biotechnology vs. Krystal Biotech | Vir Biotechnology vs. Propanc Biopharma | Vir Biotechnology vs. Blueprint Medicines Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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