Correlation Between Agios Pharm and Mersana Therapeutics
Can any of the company-specific risk be diversified away by investing in both Agios Pharm and Mersana 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 Agios Pharm and Mersana Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agios Pharm and Mersana Therapeutics, you can compare the effects of market volatilities on Agios Pharm and Mersana 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 Agios Pharm with a short position of Mersana Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agios Pharm and Mersana Therapeutics.
Diversification Opportunities for Agios Pharm and Mersana Therapeutics
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Agios and Mersana is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Agios Pharm and Mersana Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mersana Therapeutics and Agios Pharm 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 Agios Pharm are associated (or correlated) with Mersana Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mersana Therapeutics has no effect on the direction of Agios Pharm i.e., Agios Pharm and Mersana Therapeutics go up and down completely randomly.
Pair Corralation between Agios Pharm and Mersana Therapeutics
Given the investment horizon of 90 days Agios Pharm is expected to generate 0.4 times more return on investment than Mersana Therapeutics. However, Agios Pharm is 2.48 times less risky than Mersana Therapeutics. It trades about 0.06 of its potential returns per unit of risk. Mersana Therapeutics is currently generating about 0.02 per unit of risk. If you would invest 2,924 in Agios Pharm on September 2, 2024 and sell it today you would earn a total of 3,015 from holding Agios Pharm or generate 103.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agios Pharm vs. Mersana Therapeutics
Performance |
| Timeline |
| Agios Pharm |
| Mersana Therapeutics |
Agios Pharm and Mersana Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agios Pharm and Mersana Therapeutics
The main advantage of trading using opposite Agios Pharm and Mersana Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agios Pharm position performs unexpectedly, Mersana 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 Mersana Therapeutics will offset losses from the drop in Mersana Therapeutics' long position.| Agios Pharm vs. Mereo BioPharma Group | Agios Pharm vs. Blueprint Medicines Corp | Agios Pharm vs. Day One Biopharmaceuticals | Agios Pharm vs. Biomarin Pharmaceutical |
| Mersana Therapeutics vs. Terns Pharmaceuticals | Mersana Therapeutics vs. Amylyx Pharmaceuticals | Mersana Therapeutics vs. Acumen Pharmaceuticals | Mersana Therapeutics vs. Inozyme 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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