Correlation Between Ikena Oncology and MiMedx

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

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

Diversification Opportunities for Ikena Oncology and MiMedx

0.77

Correlation Coefficient

Ikena Oncology  MiMedx

Poor diversification

The 3 months correlation between Ikena and MiMedx is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ikena Oncology and MiMedx Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MiMedx Group and Ikena Oncology 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 Ikena Oncology are associated (or correlated) with MiMedx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MiMedx Group has no effect on the direction of Ikena Oncology i.e., Ikena Oncology and MiMedx go up and down completely randomly.

Pair Corralation between Ikena Oncology and MiMedx

Given the investment horizon of 90 days Ikena Oncology is expected to generate 1.24 times more return on investment than MiMedx. However, Ikena Oncology is 1.24 times more volatile than MiMedx Group. It trades about -0.1 of its potential returns per unit of risk. MiMedx Group is currently generating about -0.17 per unit of risk. If you would invest  154.00  in Ikena Oncology on December 27, 2024 and sell it today you would lose (21.00) from holding Ikena Oncology or give up 13.64% of portfolio value over 90 days.

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

Ikena Oncology  vs.  MiMedx Group

Ikena Oncology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ikena Oncology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

MiMedx Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days MiMedx Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Ikena Oncology and MiMedx

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

The idea behind Ikena Oncology and MiMedx Group 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.