Correlation Between Black Diamond and Mersana Therapeutics
Can any of the company-specific risk be diversified away by investing in both Black Diamond 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 Black Diamond and Mersana Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Diamond Therapeutics and Mersana Therapeutics, you can compare the effects of market volatilities on Black Diamond 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 Black Diamond with a short position of Mersana Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Diamond and Mersana Therapeutics.
Diversification Opportunities for Black Diamond and Mersana Therapeutics
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Black and Mersana is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Black Diamond Therapeutics and Mersana Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mersana Therapeutics and Black Diamond 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 Black Diamond Therapeutics 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 Black Diamond i.e., Black Diamond and Mersana Therapeutics go up and down completely randomly.
Pair Corralation between Black Diamond and Mersana Therapeutics
Given the investment horizon of 90 days Black Diamond Therapeutics is expected to generate 1.63 times more return on investment than Mersana Therapeutics. However, Black Diamond is 1.63 times more volatile than Mersana Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Mersana Therapeutics is currently generating about 0.02 per unit of risk. If you would invest 157.00 in Black Diamond Therapeutics on September 2, 2024 and sell it today you would earn a total of 108.00 from holding Black Diamond Therapeutics or generate 68.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Diamond Therapeutics vs. Mersana Therapeutics
Performance |
| Timeline |
| Black Diamond Therap |
| Mersana Therapeutics |
Black Diamond and Mersana Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Diamond and Mersana Therapeutics
The main advantage of trading using opposite Black Diamond and Mersana Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Diamond 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.| Black Diamond vs. Passage Bio | Black Diamond vs. Alector | Black Diamond vs. Revolution Medicines | Black Diamond vs. Stoke Therapeutics |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |