Correlation Between Akari Therapeutics and Merck
Can any of the company-specific risk be diversified away by investing in both Akari Therapeutics and Merck 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 Akari Therapeutics and Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akari Therapeutics PLC and Merck Company, you can compare the effects of market volatilities on Akari Therapeutics and Merck 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 Akari Therapeutics with a short position of Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akari Therapeutics and Merck.
Diversification Opportunities for Akari Therapeutics and Merck
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Akari and Merck is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Akari Therapeutics PLC and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company and Akari 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 Akari Therapeutics PLC are associated (or correlated) with Merck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merck Company has no effect on the direction of Akari Therapeutics i.e., Akari Therapeutics and Merck go up and down completely randomly.
Pair Corralation between Akari Therapeutics and Merck
Given the investment horizon of 90 days Akari Therapeutics PLC is expected to under-perform the Merck. In addition to that, Akari Therapeutics is 4.9 times more volatile than Merck Company. It trades about -0.02 of its total potential returns per unit of risk. Merck Company is currently generating about -0.02 per unit of volatility. If you would invest 11,378 in Merck Company on August 29, 2024 and sell it today you would lose (1,216) from holding Merck Company or give up 10.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.75% |
| Values | Daily Returns |
Akari Therapeutics PLC vs. Merck Company
Performance |
| Timeline |
| Akari Therapeutics PLC |
| Merck Company |
Akari Therapeutics and Merck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akari Therapeutics and Merck
The main advantage of trading using opposite Akari Therapeutics and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akari Therapeutics position performs unexpectedly, Merck 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 Merck will offset losses from the drop in Merck's long position.| Akari Therapeutics vs. Armata Pharmaceuticals | Akari Therapeutics vs. Anebulo Pharmaceuticals | Akari Therapeutics vs. Processa Pharmaceuticals | Akari Therapeutics vs. Salarius Pharmaceuticals |
| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
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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