Correlation Between Medicenna Therapeutics and Perimeter Medical

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

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

Diversification Opportunities for Medicenna Therapeutics and Perimeter Medical

-0.59

Correlation Coefficient

Medicenna Therapeutics  Perimeter Medical

Excellent diversification

The 3 months correlation between Medicenna and Perimeter is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Medicenna Therapeutics Corp and Perimeter Medical Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perimeter Medical Imaging and Medicenna 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 Medicenna Therapeutics Corp are associated (or correlated) with Perimeter Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perimeter Medical Imaging has no effect on the direction of Medicenna Therapeutics i.e., Medicenna Therapeutics and Perimeter Medical go up and down completely randomly.

Pair Corralation between Medicenna Therapeutics and Perimeter Medical

Assuming the 90 days trading horizon Medicenna Therapeutics Corp is expected to under-perform the Perimeter Medical. But the stock apears to be less risky and, when comparing its historical volatility, Medicenna Therapeutics Corp is 2.29 times less risky than Perimeter Medical. The stock trades about -0.25 of its potential returns per unit of risk. The Perimeter Medical Imaging is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  39.00  in Perimeter Medical Imaging on December 25, 2024 and sell it today you would earn a total of  17.00  from holding Perimeter Medical Imaging or generate 43.59% return on investment over 90 days.

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

Medicenna Therapeutics Corp  vs.  Perimeter Medical Imaging

Medicenna Therapeutics

Risk-Adjusted Performance

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 unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Perimeter Medical Imaging

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perimeter Medical Imaging are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Perimeter Medical showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Medicenna Therapeutics and Perimeter Medical

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

The idea behind Medicenna Therapeutics Corp and Perimeter Medical Imaging 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.