Correlation Between Abeona Therapeutics and Mereo BioPharma
Can any of the company-specific risk be diversified away by investing in both Abeona Therapeutics and Mereo BioPharma 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 Abeona Therapeutics and Mereo BioPharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abeona Therapeutics and Mereo BioPharma Group, you can compare the effects of market volatilities on Abeona Therapeutics and Mereo BioPharma 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 Abeona Therapeutics with a short position of Mereo BioPharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abeona Therapeutics and Mereo BioPharma.
Diversification Opportunities for Abeona Therapeutics and Mereo BioPharma
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Abeona and Mereo is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Abeona Therapeutics and Mereo BioPharma Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mereo BioPharma Group and Abeona 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 Abeona Therapeutics are associated (or correlated) with Mereo BioPharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mereo BioPharma Group has no effect on the direction of Abeona Therapeutics i.e., Abeona Therapeutics and Mereo BioPharma go up and down completely randomly.
Pair Corralation between Abeona Therapeutics and Mereo BioPharma
Given the investment horizon of 90 days Abeona Therapeutics is expected to generate 0.86 times more return on investment than Mereo BioPharma. However, Abeona Therapeutics is 1.17 times less risky than Mereo BioPharma. It trades about 0.1 of its potential returns per unit of risk. Mereo BioPharma Group is currently generating about 0.03 per unit of risk. If you would invest 452.00 in Abeona Therapeutics on September 1, 2024 and sell it today you would earn a total of 187.00 from holding Abeona Therapeutics or generate 41.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abeona Therapeutics vs. Mereo BioPharma Group
Performance |
| Timeline |
| Abeona Therapeutics |
| Mereo BioPharma Group |
Abeona Therapeutics and Mereo BioPharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abeona Therapeutics and Mereo BioPharma
The main advantage of trading using opposite Abeona Therapeutics and Mereo BioPharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abeona Therapeutics position performs unexpectedly, Mereo BioPharma 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 Mereo BioPharma will offset losses from the drop in Mereo BioPharma's long position.| Abeona Therapeutics vs. Tff Pharmaceuticals | Abeona Therapeutics vs. Eliem Therapeutics | Abeona Therapeutics vs. Inhibrx | Abeona Therapeutics vs. Enliven Therapeutics |
| Mereo BioPharma vs. Terns Pharmaceuticals | Mereo BioPharma vs. PDS Biotechnology Corp | Mereo BioPharma vs. Inozyme Pharma | Mereo BioPharma vs. Hookipa Pharma |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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