Correlation Between Dynavax Technologies and Monopar Therapeutics

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

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

Diversification Opportunities for Dynavax Technologies and Monopar Therapeutics

0.73

Correlation Coefficient

Dynavax Technologies  Monopar Therapeutics

Poor diversification

The 3 months correlation between Dynavax and Monopar is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dynavax Technologies and Monopar Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monopar Therapeutics and Dynavax Technologies 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 Dynavax Technologies are associated (or correlated) with Monopar Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monopar Therapeutics has no effect on the direction of Dynavax Technologies i.e., Dynavax Technologies and Monopar Therapeutics go up and down completely randomly.

Pair Corralation between Dynavax Technologies and Monopar Therapeutics

Given the investment horizon of 90 days Dynavax Technologies is expected to under-perform the Monopar Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Dynavax Technologies is 2.32 times less risky than Monopar Therapeutics. The stock trades about -0.01 of its potential returns per unit of risk. The Monopar Therapeutics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  4,336  in Monopar Therapeutics on May 4, 2025 and sell it today you would lose (267.00) from holding Monopar Therapeutics or give up 6.16% of portfolio value over 90 days.

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

Dynavax Technologies  vs.  Monopar Therapeutics

Dynavax Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dynavax Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Dynavax Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Monopar Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Monopar Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Monopar Therapeutics is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Dynavax Technologies and Monopar Therapeutics

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

The idea behind Dynavax Technologies and Monopar Therapeutics 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.