Correlation Between Vaccinex and Medicus Pharma

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

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

Diversification Opportunities for Vaccinex and Medicus Pharma

0.08

Correlation Coefficient

Vaccinex  Medicus Pharma

Significant diversification

The 3 months correlation between Vaccinex and Medicus is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Vaccinex and Medicus Pharma Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicus Pharma and Vaccinex 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 Vaccinex are associated (or correlated) with Medicus Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicus Pharma has no effect on the direction of Vaccinex i.e., Vaccinex and Medicus Pharma go up and down completely randomly.

Pair Corralation between Vaccinex and Medicus Pharma

Given the investment horizon of 90 days Vaccinex is expected to under-perform the Medicus Pharma. In addition to that, Vaccinex is 3.14 times more volatile than Medicus Pharma Ltd. It trades about -0.25 of its total potential returns per unit of risk. Medicus Pharma Ltd is currently generating about -0.1 per unit of volatility. If you would invest  290.00  in Medicus Pharma Ltd on October 6, 2024 and sell it today you would lose (39.00) from holding Medicus Pharma Ltd or give up 13.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	85.0%
Values	Daily Returns

Vaccinex  vs.  Medicus Pharma Ltd

Vaccinex

Risk-Adjusted Performance

0 of 100

Very Weak

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

Medicus Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medicus Pharma Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Vaccinex and Medicus Pharma

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

The idea behind Vaccinex and Medicus Pharma Ltd 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.