Correlation Between Cipher Pharmaceuticals and Medexus Pharmaceuticals

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

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

Diversification Opportunities for Cipher Pharmaceuticals and Medexus Pharmaceuticals

-0.15

Correlation Coefficient

Cipher Pharmaceuticals  Medexus Pharmaceuticals

Good diversification

The 3 months correlation between Cipher and Medexus is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Cipher Pharmaceuticals and Medexus Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medexus Pharmaceuticals and Cipher Pharmaceuticals 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 Cipher Pharmaceuticals are associated (or correlated) with Medexus Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medexus Pharmaceuticals has no effect on the direction of Cipher Pharmaceuticals i.e., Cipher Pharmaceuticals and Medexus Pharmaceuticals go up and down completely randomly.

Pair Corralation between Cipher Pharmaceuticals and Medexus Pharmaceuticals

Assuming the 90 days trading horizon Cipher Pharmaceuticals is expected to generate 0.93 times more return on investment than Medexus Pharmaceuticals. However, Cipher Pharmaceuticals is 1.08 times less risky than Medexus Pharmaceuticals. It trades about 0.12 of its potential returns per unit of risk. Medexus Pharmaceuticals is currently generating about 0.01 per unit of risk. If you would invest  1,250  in Cipher Pharmaceuticals on May 27, 2025 and sell it today you would earn a total of  260.00  from holding Cipher Pharmaceuticals or generate 20.8% return on investment over 90 days.

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

Cipher Pharmaceuticals  vs.  Medexus Pharmaceuticals

Cipher Pharmaceuticals

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Cipher Pharmaceuticals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal technical indicators, Cipher Pharmaceuticals displayed solid returns over the last few months and may actually be approaching a breakup point.

Medexus Pharmaceuticals

Risk-Adjusted Performance

Weakest

Over the last 90 days Medexus Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Medexus Pharmaceuticals is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cipher Pharmaceuticals and Medexus Pharmaceuticals

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

The idea behind Cipher Pharmaceuticals and Medexus 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.