Correlation Between Northwest Biotherapeutics and Medigene
Can any of the company-specific risk be diversified away by investing in both Northwest Biotherapeutics and Medigene 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 Northwest Biotherapeutics and Medigene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northwest Biotherapeutics and Medigene AG, you can compare the effects of market volatilities on Northwest Biotherapeutics and Medigene 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 Northwest Biotherapeutics with a short position of Medigene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northwest Biotherapeutics and Medigene.
Diversification Opportunities for Northwest Biotherapeutics and Medigene
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Northwest and Medigene is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Northwest Biotherapeutics and Medigene AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medigene AG and Northwest Biotherapeutics 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 Northwest Biotherapeutics are associated (or correlated) with Medigene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medigene AG has no effect on the direction of Northwest Biotherapeutics i.e., Northwest Biotherapeutics and Medigene go up and down completely randomly.
Pair Corralation between Northwest Biotherapeutics and Medigene
If you would invest 30.00 in Northwest Biotherapeutics on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Northwest Biotherapeutics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Northwest Biotherapeutics vs. Medigene AG
Performance |
| Timeline |
| Northwest Biotherapeutics |
| Medigene AG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Northwest Biotherapeutics and Medigene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northwest Biotherapeutics and Medigene
The main advantage of trading using opposite Northwest Biotherapeutics and Medigene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northwest Biotherapeutics position performs unexpectedly, Medigene 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 Medigene will offset losses from the drop in Medigene's long position.The idea behind Northwest Biotherapeutics and Medigene AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Medigene vs. Northwest Biotherapeutics | Medigene vs. Geron | Medigene vs. Advanced Proteome Therapeutics | Medigene vs. Oxford BioDynamics Plc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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