Correlation Between Achilles Therapeutics and Merrimack Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Achilles Therapeutics and Merrimack 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 Achilles Therapeutics and Merrimack Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Achilles Therapeutics PLC and Merrimack Pharmaceuticals, you can compare the effects of market volatilities on Achilles Therapeutics and Merrimack 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 Achilles Therapeutics with a short position of Merrimack Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Achilles Therapeutics and Merrimack Pharmaceuticals.
Diversification Opportunities for Achilles Therapeutics and Merrimack Pharmaceuticals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Achilles and Merrimack is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Achilles Therapeutics PLC and Merrimack Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merrimack Pharmaceuticals and Achilles 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 Achilles Therapeutics PLC are associated (or correlated) with Merrimack Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merrimack Pharmaceuticals has no effect on the direction of Achilles Therapeutics i.e., Achilles Therapeutics and Merrimack Pharmaceuticals go up and down completely randomly.
Pair Corralation between Achilles Therapeutics and Merrimack Pharmaceuticals
Given the investment horizon of 90 days Achilles Therapeutics PLC is expected to generate 3.26 times more return on investment than Merrimack Pharmaceuticals. However, Achilles Therapeutics is 3.26 times more volatile than Merrimack Pharmaceuticals. It trades about 0.02 of its potential returns per unit of risk. Merrimack Pharmaceuticals is currently generating about 0.01 per unit of risk. If you would invest 120.00 in Achilles Therapeutics PLC on October 25, 2024 and sell it today you would lose (5.66) from holding Achilles Therapeutics PLC or give up 4.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 23.89% |
| Values | Daily Returns |
Achilles Therapeutics PLC vs. Merrimack Pharmaceuticals
Performance |
| Timeline |
| Achilles Therapeutics PLC |
| Merrimack Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Achilles Therapeutics and Merrimack Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Achilles Therapeutics and Merrimack Pharmaceuticals
The main advantage of trading using opposite Achilles Therapeutics and Merrimack Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Achilles Therapeutics position performs unexpectedly, Merrimack 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 Merrimack Pharmaceuticals will offset losses from the drop in Merrimack Pharmaceuticals' long position.| Achilles Therapeutics vs. Assembly Biosciences | Achilles Therapeutics vs. Spero Therapeutics | Achilles Therapeutics vs. Instil Bio | Achilles Therapeutics vs. Nuvation Bio |
| Merrimack Pharmaceuticals vs. Amicus Therapeutics | Merrimack Pharmaceuticals vs. Celldex Therapeutics | Merrimack Pharmaceuticals vs. Puma Biotechnology | Merrimack Pharmaceuticals vs. Agios Pharm |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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