Correlation Between Immutep and MediciNova

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

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

Diversification Opportunities for Immutep and MediciNova

0.26

Correlation Coefficient

Immutep  MediciNova

Modest diversification

The 3 months correlation between Immutep and MediciNova is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Immutep Ltd ADR and MediciNova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediciNova and Immutep 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 Immutep Ltd ADR 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 Immutep i.e., Immutep and MediciNova go up and down completely randomly.

Pair Corralation between Immutep and MediciNova

Given the investment horizon of 90 days Immutep Ltd ADR is expected to under-perform the MediciNova. But the stock apears to be less risky and, when comparing its historical volatility, Immutep Ltd ADR is 2.17 times less risky than MediciNova. The stock trades about -0.01 of its potential returns per unit of risk. The MediciNova is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  180.00  in MediciNova on September 15, 2024 and sell it today you would earn a total of  34.00  from holding MediciNova or generate 18.89% return on investment over 90 days.

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

Immutep Ltd ADR  vs.  MediciNova

Immutep Ltd ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immutep Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Immutep is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

MediciNova

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MediciNova are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, MediciNova showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Immutep and MediciNova

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

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.