Correlation Between Mereo BioPharma and Helical Bar
Can any of the company-specific risk be diversified away by investing in both Mereo BioPharma and Helical Bar 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 Mereo BioPharma and Helical Bar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mereo BioPharma Group and Helical Bar Plc, you can compare the effects of market volatilities on Mereo BioPharma and Helical Bar 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 Mereo BioPharma with a short position of Helical Bar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mereo BioPharma and Helical Bar.
Diversification Opportunities for Mereo BioPharma and Helical Bar
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mereo and Helical is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mereo BioPharma Group and Helical Bar Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helical Bar Plc and Mereo BioPharma 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 Mereo BioPharma Group are associated (or correlated) with Helical Bar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helical Bar Plc has no effect on the direction of Mereo BioPharma i.e., Mereo BioPharma and Helical Bar go up and down completely randomly.
Pair Corralation between Mereo BioPharma and Helical Bar
Assuming the 90 days trading horizon Mereo BioPharma Group is expected to generate 2.28 times more return on investment than Helical Bar. However, Mereo BioPharma is 2.28 times more volatile than Helical Bar Plc. It trades about 0.03 of its potential returns per unit of risk. Helical Bar Plc is currently generating about -0.04 per unit of risk. If you would invest 339.00 in Mereo BioPharma Group on September 1, 2024 and sell it today you would earn a total of 16.00 from holding Mereo BioPharma Group or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.24% |
| Values | Daily Returns |
Mereo BioPharma Group vs. Helical Bar Plc
Performance |
| Timeline |
| Mereo BioPharma Group |
| Helical Bar Plc |
Mereo BioPharma and Helical Bar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mereo BioPharma and Helical Bar
The main advantage of trading using opposite Mereo BioPharma and Helical Bar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mereo BioPharma position performs unexpectedly, Helical Bar 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 Helical Bar will offset losses from the drop in Helical Bar's long position.| Mereo BioPharma vs. Uniper SE | Mereo BioPharma vs. Mulberry Group PLC | Mereo BioPharma vs. London Security Plc | Mereo BioPharma vs. Triad Group PLC |
| Helical Bar vs. Cizzle Biotechnology Holdings | Helical Bar vs. Zoom Video Communications | Helical Bar vs. United States Steel | Helical Bar vs. Cars Inc |
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 Stocks Directory module to find actively traded stocks across global markets.
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