Correlation Between CytomX Therapeutics and Merrimack Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both CytomX 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 CytomX 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 CytomX Therapeutics and Merrimack Pharmaceuticals, you can compare the effects of market volatilities on CytomX 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 CytomX Therapeutics with a short position of Merrimack Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CytomX Therapeutics and Merrimack Pharmaceuticals.
Diversification Opportunities for CytomX Therapeutics and Merrimack Pharmaceuticals
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CytomX and Merrimack is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding CytomX Therapeutics and Merrimack Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merrimack Pharmaceuticals and CytomX 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 CytomX Therapeutics 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 CytomX Therapeutics i.e., CytomX Therapeutics and Merrimack Pharmaceuticals go up and down completely randomly.
Pair Corralation between CytomX Therapeutics and Merrimack Pharmaceuticals
Given the investment horizon of 90 days CytomX Therapeutics is expected to generate 9.62 times more return on investment than Merrimack Pharmaceuticals. However, CytomX Therapeutics is 9.62 times more volatile than Merrimack Pharmaceuticals. It trades about 0.01 of its potential returns per unit of risk. Merrimack Pharmaceuticals is currently generating about 0.01 per unit of risk. If you would invest 265.00 in CytomX Therapeutics on October 25, 2024 and sell it today you would lose (178.22) from holding CytomX Therapeutics or give up 67.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 23.89% |
| Values | Daily Returns |
CytomX Therapeutics vs. Merrimack Pharmaceuticals
Performance |
| Timeline |
| CytomX Therapeutics |
| Merrimack Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CytomX Therapeutics and Merrimack Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CytomX Therapeutics and Merrimack Pharmaceuticals
The main advantage of trading using opposite CytomX Therapeutics and Merrimack Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CytomX 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.| CytomX Therapeutics vs. Spero Therapeutics | CytomX Therapeutics vs. Instil Bio | CytomX Therapeutics vs. NextCure | CytomX Therapeutics vs. Assembly Biosciences |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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