Correlation Between Quoin Pharmaceuticals and Dynavax Technologies

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

By analyzing existing cross correlation between Quoin Pharmaceuticals Ltd and Dynavax Technologies, you can compare the effects of market volatilities on Quoin Pharmaceuticals and Dynavax Technologies 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 Quoin Pharmaceuticals with a short position of Dynavax Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quoin Pharmaceuticals and Dynavax Technologies.

Diversification Opportunities for Quoin Pharmaceuticals and Dynavax Technologies

0.04

Correlation Coefficient

Quoin Pharmaceuticals  Dynavax Technologies

Significant diversification

The 3 months correlation between Quoin and Dynavax is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Quoin Pharmaceuticals Ltd and Dynavax Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynavax Technologies and Quoin Pharmaceuticals 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 Quoin Pharmaceuticals Ltd are associated (or correlated) with Dynavax Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynavax Technologies has no effect on the direction of Quoin Pharmaceuticals i.e., Quoin Pharmaceuticals and Dynavax Technologies go up and down completely randomly.

Pair Corralation between Quoin Pharmaceuticals and Dynavax Technologies

Given the investment horizon of 90 days Quoin Pharmaceuticals Ltd is expected to under-perform the Dynavax Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Quoin Pharmaceuticals Ltd is 1.06 times less risky than Dynavax Technologies. The stock trades about -0.16 of its potential returns per unit of risk. The Dynavax Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,179  in Dynavax Technologies on September 4, 2024 and sell it today you would earn a total of  100.00  from holding Dynavax Technologies or generate 8.48% return on investment over 90 days.

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

Quoin Pharmaceuticals Ltd  vs.  Dynavax Technologies

Quoin Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quoin Pharmaceuticals Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly conflicting basic indicators, Quoin Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Dynavax Technologies

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dynavax Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Dynavax Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quoin Pharmaceuticals and Dynavax Technologies

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

The idea behind Quoin Pharmaceuticals Ltd and Dynavax 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.