Correlation Between Equinor ASA and MIRA Pharmaceuticals

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

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

Diversification Opportunities for Equinor ASA and MIRA Pharmaceuticals

0.0

Correlation Coefficient

Equinor ASA  MIRA Pharmaceuticals

Pay attention - limited upside

The 3 months correlation between Equinor and MIRA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Equinor ASA ADR and MIRA Pharmaceuticals Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRA Pharmaceuticals and Equinor ASA 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 Equinor ASA ADR are associated (or correlated) with MIRA Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRA Pharmaceuticals has no effect on the direction of Equinor ASA i.e., Equinor ASA and MIRA Pharmaceuticals go up and down completely randomly.

Pair Corralation between Equinor ASA and MIRA Pharmaceuticals

If you would invest  2,446  in Equinor ASA ADR on February 26, 2024 and sell it today you would earn a total of  388.00  from holding Equinor ASA ADR or generate 15.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Equinor ASA ADR  vs.  MIRA Pharmaceuticals Common

Equinor ASA ADR

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Equinor ASA ADR are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Equinor ASA reported solid returns over the last few months and may actually be approaching a breakup point.

MIRA Pharmaceuticals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MIRA Pharmaceuticals Common are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MIRA Pharmaceuticals sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Equinor ASA and MIRA Pharmaceuticals

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

The idea behind Equinor ASA ADR and MIRA Pharmaceuticals Common 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.