Correlation Between Helix BioPharma and Medicenna Therapeutics

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

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

Diversification Opportunities for Helix BioPharma and Medicenna Therapeutics

0.37

Correlation Coefficient

Helix BioPharma  Medicenna Therapeutics

Weak diversification

The 3 months correlation between Helix and Medicenna is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Helix BioPharma Corp and Medicenna Therapeutics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicenna Therapeutics and Helix BioPharma 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 Helix BioPharma Corp are associated (or correlated) with Medicenna Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicenna Therapeutics has no effect on the direction of Helix BioPharma i.e., Helix BioPharma and Medicenna Therapeutics go up and down completely randomly.

Pair Corralation between Helix BioPharma and Medicenna Therapeutics

Assuming the 90 days trading horizon Helix BioPharma is expected to generate 2.77 times less return on investment than Medicenna Therapeutics. But when comparing it to its historical volatility, Helix BioPharma Corp is 1.11 times less risky than Medicenna Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Medicenna Therapeutics Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  54.00  in Medicenna Therapeutics Corp on September 14, 2024 and sell it today you would earn a total of  127.00  from holding Medicenna Therapeutics Corp or generate 235.19% return on investment over 90 days.

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

Helix BioPharma Corp  vs.  Medicenna Therapeutics Corp

Helix BioPharma Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helix BioPharma Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Medicenna Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medicenna Therapeutics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Medicenna Therapeutics is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Helix BioPharma and Medicenna Therapeutics

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

The idea behind Helix BioPharma Corp and Medicenna Therapeutics Corp 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.