Correlation Between Inhibikase Therapeutics and Merck
Can any of the company-specific risk be diversified away by investing in both Inhibikase Therapeutics and Merck 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 Inhibikase Therapeutics and Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inhibikase Therapeutics and Merck Company, you can compare the effects of market volatilities on Inhibikase Therapeutics and Merck 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 Inhibikase Therapeutics with a short position of Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inhibikase Therapeutics and Merck.
Diversification Opportunities for Inhibikase Therapeutics and Merck
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Inhibikase and Merck is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Inhibikase Therapeutics and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company and Inhibikase 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 Inhibikase Therapeutics are associated (or correlated) with Merck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merck Company has no effect on the direction of Inhibikase Therapeutics i.e., Inhibikase Therapeutics and Merck go up and down completely randomly.
Pair Corralation between Inhibikase Therapeutics and Merck
Considering the 90-day investment horizon Inhibikase Therapeutics is expected to under-perform the Merck. In addition to that, Inhibikase Therapeutics is 6.13 times more volatile than Merck Company. It trades about -0.31 of its total potential returns per unit of risk. Merck Company is currently generating about -0.01 per unit of volatility. If you would invest 9,917 in Merck Company on November 3, 2024 and sell it today you would lose (35.00) from holding Merck Company or give up 0.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Inhibikase Therapeutics vs. Merck Company
Performance |
| Timeline |
| Inhibikase Therapeutics |
| Merck Company |
Inhibikase Therapeutics and Merck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inhibikase Therapeutics and Merck
The main advantage of trading using opposite Inhibikase Therapeutics and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inhibikase Therapeutics position performs unexpectedly, Merck 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 Merck will offset losses from the drop in Merck's long position.| Inhibikase Therapeutics vs. DiaMedica Therapeutics | Inhibikase Therapeutics vs. Milestone Pharmaceuticals | Inhibikase Therapeutics vs. Seres Therapeutics | Inhibikase Therapeutics vs. Oncolytics Biotech |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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