Correlation Between NextCure and MediciNova
Can any of the company-specific risk be diversified away by investing in both NextCure and MediciNova 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 NextCure and MediciNova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextCure and MediciNova, you can compare the effects of market volatilities on NextCure and MediciNova 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 NextCure with a short position of MediciNova. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCure and MediciNova.
Diversification Opportunities for NextCure and MediciNova
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NextCure and MediciNova is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding NextCure and MediciNova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediciNova and NextCure 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 NextCure are associated (or correlated) with MediciNova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediciNova has no effect on the direction of NextCure i.e., NextCure and MediciNova go up and down completely randomly.
Pair Corralation between NextCure and MediciNova
Given the investment horizon of 90 days NextCure is expected to under-perform the MediciNova. In addition to that, NextCure is 1.69 times more volatile than MediciNova. It trades about -0.18 of its total potential returns per unit of risk. MediciNova is currently generating about -0.29 per unit of volatility. If you would invest 216.00 in MediciNova on October 20, 2024 and sell it today you would lose (33.00) from holding MediciNova or give up 15.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NextCure vs. MediciNova
Performance |
| Timeline |
| NextCure |
| MediciNova |
NextCure and MediciNova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextCure and MediciNova
The main advantage of trading using opposite NextCure and MediciNova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextCure position performs unexpectedly, MediciNova 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 MediciNova will offset losses from the drop in MediciNova's long position.| NextCure vs. CytomX Therapeutics | NextCure vs. Spero Therapeutics | NextCure vs. Instil Bio | NextCure vs. Assembly Biosciences |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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