Correlation Between Verastem and Miravant Medical
Can any of the company-specific risk be diversified away by investing in both Verastem and Miravant Medical 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 Verastem and Miravant Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verastem and Miravant Medical Technologies, you can compare the effects of market volatilities on Verastem and Miravant Medical 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 Verastem with a short position of Miravant Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verastem and Miravant Medical.
Diversification Opportunities for Verastem and Miravant Medical
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Verastem and Miravant is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Verastem and Miravant Medical Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miravant Medical Tec and Verastem 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 Verastem are associated (or correlated) with Miravant Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miravant Medical Tec has no effect on the direction of Verastem i.e., Verastem and Miravant Medical go up and down completely randomly.
Pair Corralation between Verastem and Miravant Medical
If you would invest 328.00 in Verastem on August 24, 2024 and sell it today you would earn a total of 65.00 from holding Verastem or generate 19.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Verastem vs. Miravant Medical Technologies
Performance |
| Timeline |
| Verastem |
| Miravant Medical Tec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Verastem and Miravant Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verastem and Miravant Medical
The main advantage of trading using opposite Verastem and Miravant Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verastem position performs unexpectedly, Miravant Medical 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 Miravant Medical will offset losses from the drop in Miravant Medical's long position.The idea behind Verastem and Miravant Medical Technologies 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.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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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