Correlation Between MediciNova and Careview Comm

Can any of the company-specific risk be diversified away by investing in both MediciNova and Careview Comm 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 Careview Comm into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MediciNova and Careview Comm, you can compare the effects of market volatilities on MediciNova and Careview Comm 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 Careview Comm. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediciNova and Careview Comm.

Diversification Opportunities for MediciNova and Careview Comm

-0.09

Correlation Coefficient

MediciNova  Careview Comm

Good diversification

The 3 months correlation between MediciNova and Careview is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding MediciNova and Careview Comm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Careview Comm 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 Careview Comm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Careview Comm has no effect on the direction of MediciNova i.e., MediciNova and Careview Comm go up and down completely randomly.

Pair Corralation between MediciNova and Careview Comm

Given the investment horizon of 90 days MediciNova is expected to generate 0.74 times more return on investment than Careview Comm. However, MediciNova is 1.34 times less risky than Careview Comm. It trades about 0.08 of its potential returns per unit of risk. Careview Comm is currently generating about 0.0 per unit of risk. If you would invest  180.00  in MediciNova on September 5, 2024 and sell it today you would earn a total of  50.00  from holding MediciNova or generate 27.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MediciNova  vs.  Careview Comm

MediciNova

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MediciNova are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, MediciNova showed solid returns over the last few months and may actually be approaching a breakup point.

Careview Comm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Careview Comm has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Careview Comm is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with MediciNova and Careview Comm

The main advantage of trading using opposite MediciNova and Careview Comm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediciNova position performs unexpectedly, Careview Comm 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 Careview Comm will offset losses from the drop in Careview Comm's long position.

The idea behind MediciNova and Careview Comm 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 Global Correlations module to find global opportunities by holding instruments from different markets.