Correlation Between Celcuity LLC and MediciNova

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

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

Diversification Opportunities for Celcuity LLC and MediciNova

-0.74

Correlation Coefficient

Celcuity LLC  MediciNova

Pay attention - limited upside

The 3 months correlation between Celcuity and MediciNova is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Celcuity LLC and MediciNova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediciNova and Celcuity LLC 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 Celcuity LLC 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 Celcuity LLC i.e., Celcuity LLC and MediciNova go up and down completely randomly.

Pair Corralation between Celcuity LLC and MediciNova

Given the investment horizon of 90 days Celcuity LLC is expected to generate 0.92 times more return on investment than MediciNova. However, Celcuity LLC is 1.09 times less risky than MediciNova. It trades about 0.2 of its potential returns per unit of risk. MediciNova is currently generating about -0.25 per unit of risk. If you would invest  1,263  in Celcuity LLC on October 1, 2024 and sell it today you would earn a total of  121.00  from holding Celcuity LLC or generate 9.58% return on investment over 90 days.

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

Celcuity LLC  vs.  MediciNova

Celcuity LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celcuity LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Celcuity LLC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

MediciNova

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MediciNova are ranked lower than 2 (%) 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.

Pair Trading with Celcuity LLC and MediciNova

The main advantage of trading using opposite Celcuity LLC and MediciNova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celcuity LLC 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.

The idea behind Celcuity LLC and MediciNova 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.