Correlation Between First Merchants and MyMD Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both First Merchants and MyMD 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 First Merchants and MyMD Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Merchants and MyMD Pharmaceuticals, you can compare the effects of market volatilities on First Merchants and MyMD 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 First Merchants with a short position of MyMD Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Merchants and MyMD Pharmaceuticals.
Diversification Opportunities for First Merchants and MyMD Pharmaceuticals
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and MyMD is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding First Merchants and MyMD Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MyMD Pharmaceuticals and First Merchants 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 First Merchants are associated (or correlated) with MyMD Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MyMD Pharmaceuticals has no effect on the direction of First Merchants i.e., First Merchants and MyMD Pharmaceuticals go up and down completely randomly.
Pair Corralation between First Merchants and MyMD Pharmaceuticals
If you would invest 3,649 in First Merchants on September 26, 2024 and sell it today you would earn a total of 438.00 from holding First Merchants or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 1.59% |
| Values | Daily Returns |
First Merchants vs. MyMD Pharmaceuticals
Performance |
| Timeline |
| First Merchants |
| MyMD Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Merchants and MyMD Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Merchants and MyMD Pharmaceuticals
The main advantage of trading using opposite First Merchants and MyMD Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Merchants position performs unexpectedly, MyMD 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 MyMD Pharmaceuticals will offset losses from the drop in MyMD Pharmaceuticals' long position.| First Merchants vs. Home Bancorp | First Merchants vs. HomeTrust Bancshares | First Merchants vs. Great Southern Bancorp | First Merchants vs. Finward Bancorp |
| MyMD Pharmaceuticals vs. Recursion Pharmaceuticals | MyMD Pharmaceuticals vs. Atea Pharmaceuticals | MyMD Pharmaceuticals vs. Unity Biotechnology | MyMD Pharmaceuticals vs. Replimune Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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