Correlation Between Ocular Therapeutix and MediciNova
Can any of the company-specific risk be diversified away by investing in both Ocular Therapeutix 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 Ocular Therapeutix and MediciNova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocular Therapeutix and MediciNova, you can compare the effects of market volatilities on Ocular Therapeutix 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 Ocular Therapeutix with a short position of MediciNova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocular Therapeutix and MediciNova.
Diversification Opportunities for Ocular Therapeutix and MediciNova
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ocular and MediciNova is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ocular Therapeutix and MediciNova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediciNova and Ocular Therapeutix 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 Ocular Therapeutix 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 Ocular Therapeutix i.e., Ocular Therapeutix and MediciNova go up and down completely randomly.
Pair Corralation between Ocular Therapeutix and MediciNova
Given the investment horizon of 90 days Ocular Therapeutix is expected to under-perform the MediciNova. But the stock apears to be less risky and, when comparing its historical volatility, Ocular Therapeutix is 3.55 times less risky than MediciNova. The stock trades about -0.3 of its potential returns per unit of risk. The MediciNova is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 163.00 in MediciNova on August 28, 2024 and sell it today you would earn a total of 42.00 from holding MediciNova or generate 25.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocular Therapeutix vs. MediciNova
Performance |
| Timeline |
| Ocular Therapeutix |
| MediciNova |
Ocular Therapeutix and MediciNova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocular Therapeutix and MediciNova
The main advantage of trading using opposite Ocular Therapeutix and MediciNova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocular Therapeutix 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.| Ocular Therapeutix vs. CytomX Therapeutics | Ocular Therapeutix vs. Assembly Biosciences | Ocular Therapeutix vs. Spero Therapeutics | Ocular Therapeutix vs. Achilles Therapeutics PLC |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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