Correlation Between Bluebird Bio and Mersana Therapeutics
Can any of the company-specific risk be diversified away by investing in both Bluebird Bio 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 Bluebird Bio and Mersana Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluebird bio and Mersana Therapeutics, you can compare the effects of market volatilities on Bluebird Bio 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 Bluebird Bio with a short position of Mersana Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluebird Bio and Mersana Therapeutics.
Diversification Opportunities for Bluebird Bio and Mersana Therapeutics
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bluebird and Mersana is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bluebird bio and Mersana Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mersana Therapeutics and Bluebird Bio 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 Bluebird bio 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 Bluebird Bio i.e., Bluebird Bio and Mersana Therapeutics go up and down completely randomly.
Pair Corralation between Bluebird Bio and Mersana Therapeutics
Given the investment horizon of 90 days Bluebird bio is expected to under-perform the Mersana Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Bluebird bio is 1.15 times less risky than Mersana Therapeutics. The stock trades about -0.06 of its potential returns per unit of risk. The Mersana Therapeutics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 675.00 in Mersana Therapeutics on September 2, 2024 and sell it today you would lose (447.00) from holding Mersana Therapeutics or give up 66.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bluebird bio vs. Mersana Therapeutics
Performance |
| Timeline |
| Bluebird bio |
| Mersana Therapeutics |
Bluebird Bio and Mersana Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluebird Bio and Mersana Therapeutics
The main advantage of trading using opposite Bluebird Bio and Mersana Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluebird Bio 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.| Bluebird Bio vs. Mersana Therapeutics | Bluebird Bio vs. Zentalis Pharmaceuticals Llc | Bluebird Bio vs. Y mAbs Therapeutics | Bluebird Bio vs. Travere 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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