Correlation Between Medicenna Therapeutics and Cipher Pharmaceuticals

Can any of the company-specific risk be diversified away by investing in both Medicenna Therapeutics and Cipher 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 Medicenna Therapeutics and Cipher Pharmaceuticals 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 Cipher Pharmaceuticals, you can compare the effects of market volatilities on Medicenna Therapeutics and Cipher 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 Medicenna Therapeutics with a short position of Cipher Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medicenna Therapeutics and Cipher Pharmaceuticals.

Diversification Opportunities for Medicenna Therapeutics and Cipher Pharmaceuticals

-0.05

Correlation Coefficient

Medicenna Therapeutics  Cipher Pharmaceuticals

Good diversification

The 3 months correlation between Medicenna and Cipher is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Medicenna Therapeutics Corp and Cipher Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipher Pharmaceuticals 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 Cipher Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipher Pharmaceuticals has no effect on the direction of Medicenna Therapeutics i.e., Medicenna Therapeutics and Cipher Pharmaceuticals go up and down completely randomly.

Pair Corralation between Medicenna Therapeutics and Cipher Pharmaceuticals

Assuming the 90 days trading horizon Medicenna Therapeutics Corp is expected to under-perform the Cipher Pharmaceuticals. In addition to that, Medicenna Therapeutics is 1.61 times more volatile than Cipher Pharmaceuticals. It trades about -0.09 of its total potential returns per unit of risk. Cipher Pharmaceuticals is currently generating about 0.03 per unit of volatility. If you would invest  1,200  in Cipher Pharmaceuticals on April 24, 2025 and sell it today you would earn a total of  35.00  from holding Cipher Pharmaceuticals or generate 2.92% return on investment over 90 days.

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

Medicenna Therapeutics Corp  vs.  Cipher Pharmaceuticals

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 August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Cipher Pharmaceuticals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cipher Pharmaceuticals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical indicators, Cipher Pharmaceuticals is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Medicenna Therapeutics and Cipher Pharmaceuticals

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

The idea behind Medicenna Therapeutics Corp and Cipher Pharmaceuticals 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.