Correlation Between Medmen Enterprises and Dynavax Technologies

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

By analyzing existing cross correlation between Medmen Enterprises Class and Dynavax Technologies, you can compare the effects of market volatilities on Medmen Enterprises and Dynavax Technologies 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 Medmen Enterprises with a short position of Dynavax Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medmen Enterprises and Dynavax Technologies.

Diversification Opportunities for Medmen Enterprises and Dynavax Technologies

0.37

Correlation Coefficient

Medmen Enterprises  Dynavax Technologies

Weak diversification

The 3 months correlation between Medmen and Dynavax is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Medmen Enterprises Class and Dynavax Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynavax Technologies and Medmen Enterprises 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 Medmen Enterprises Class are associated (or correlated) with Dynavax Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynavax Technologies has no effect on the direction of Medmen Enterprises i.e., Medmen Enterprises and Dynavax Technologies go up and down completely randomly.

Pair Corralation between Medmen Enterprises and Dynavax Technologies

If you would invest  1,185  in Dynavax Technologies on September 1, 2024 and sell it today you would earn a total of  106.00  from holding Dynavax Technologies or generate 8.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Medmen Enterprises Class  vs.  Dynavax Technologies

Medmen Enterprises Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medmen Enterprises Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Medmen Enterprises is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Dynavax Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dynavax Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Dynavax Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Medmen Enterprises and Dynavax Technologies

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

The idea behind Medmen Enterprises Class and Dynavax Technologies 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.