Correlation Between Durect and Mersana Therapeutics
Can any of the company-specific risk be diversified away by investing in both Durect 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 Durect and Mersana Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Durect and Mersana Therapeutics, you can compare the effects of market volatilities on Durect 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 Durect with a short position of Mersana Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Durect and Mersana Therapeutics.
Diversification Opportunities for Durect and Mersana Therapeutics
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Durect and Mersana is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Durect and Mersana Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mersana Therapeutics and Durect 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 Durect 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 Durect i.e., Durect and Mersana Therapeutics go up and down completely randomly.
Pair Corralation between Durect and Mersana Therapeutics
Given the investment horizon of 90 days Durect is expected to under-perform the Mersana Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Durect is 1.26 times less risky than Mersana Therapeutics. The stock trades about -0.24 of its potential returns per unit of risk. The Mersana Therapeutics is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 184.00 in Mersana Therapeutics on September 4, 2024 and sell it today you would earn a total of 46.00 from holding Mersana Therapeutics or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Durect vs. Mersana Therapeutics
Performance |
| Timeline |
| Durect |
| Mersana Therapeutics |
Durect and Mersana Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Durect and Mersana Therapeutics
The main advantage of trading using opposite Durect and Mersana Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Durect 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.| Durect vs. Shuttle Pharmaceuticals | Durect vs. Organogenesis Holdings | Durect vs. Alpha Teknova | Durect vs. Sonoma Pharmaceuticals |
| 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |