Correlation Between Entero Therapeutics, and Mediwound

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

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

Diversification Opportunities for Entero Therapeutics, and Mediwound

-0.12

Correlation Coefficient

Entero Therapeutics,  Mediwound

Good diversification

The 3 months correlation between Entero and Mediwound is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Entero Therapeutics, and Mediwound in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediwound and Entero Therapeutics, 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 Entero Therapeutics, are associated (or correlated) with Mediwound. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediwound has no effect on the direction of Entero Therapeutics, i.e., Entero Therapeutics, and Mediwound go up and down completely randomly.

Pair Corralation between Entero Therapeutics, and Mediwound

Given the investment horizon of 90 days Entero Therapeutics, is expected to under-perform the Mediwound. In addition to that, Entero Therapeutics, is 1.69 times more volatile than Mediwound. It trades about -0.02 of its total potential returns per unit of risk. Mediwound is currently generating about 0.0 per unit of volatility. If you would invest  1,767  in Mediwound on December 21, 2024 and sell it today you would lose (62.00) from holding Mediwound or give up 3.51% of portfolio value over 90 days.

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

Entero Therapeutics,  vs.  Mediwound

Entero Therapeutics,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entero Therapeutics, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Mediwound

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Entero Therapeutics, and Mediwound

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

The idea behind Entero Therapeutics, and Mediwound 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.