Correlation Between Medicus Pharma and Surrozen Warrant

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

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

Diversification Opportunities for Medicus Pharma and Surrozen Warrant

0.07

Correlation Coefficient

Medicus Pharma  Surrozen Warrant

Significant diversification

The 3 months correlation between Medicus and Surrozen is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Medicus Pharma Ltd and Surrozen Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surrozen Warrant and Medicus Pharma 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 Medicus Pharma Ltd are associated (or correlated) with Surrozen Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surrozen Warrant has no effect on the direction of Medicus Pharma i.e., Medicus Pharma and Surrozen Warrant go up and down completely randomly.

Pair Corralation between Medicus Pharma and Surrozen Warrant

Given the investment horizon of 90 days Medicus Pharma is expected to generate 10.29 times less return on investment than Surrozen Warrant. But when comparing it to its historical volatility, Medicus Pharma Ltd is 4.79 times less risky than Surrozen Warrant. It trades about 0.08 of its potential returns per unit of risk. Surrozen Warrant is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2.99  in Surrozen Warrant on December 22, 2024 and sell it today you would lose (0.05) from holding Surrozen Warrant or give up 1.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	71.67%
Values	Daily Returns

Medicus Pharma Ltd  vs.  Surrozen Warrant

Medicus Pharma

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Medicus Pharma Ltd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, Medicus Pharma showed solid returns over the last few months and may actually be approaching a breakup point.

Surrozen Warrant

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Surrozen Warrant are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Surrozen Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Medicus Pharma and Surrozen Warrant

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

The idea behind Medicus Pharma Ltd and Surrozen Warrant 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.