Correlation Between Lyell Immunopharma and Merus BV
Can any of the company-specific risk be diversified away by investing in both Lyell Immunopharma and Merus BV 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 Lyell Immunopharma and Merus BV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyell Immunopharma and Merus BV, you can compare the effects of market volatilities on Lyell Immunopharma and Merus BV 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 Lyell Immunopharma with a short position of Merus BV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyell Immunopharma and Merus BV.
Diversification Opportunities for Lyell Immunopharma and Merus BV
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lyell and Merus is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lyell Immunopharma and Merus BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merus BV and Lyell Immunopharma 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 Lyell Immunopharma are associated (or correlated) with Merus BV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merus BV has no effect on the direction of Lyell Immunopharma i.e., Lyell Immunopharma and Merus BV go up and down completely randomly.
Pair Corralation between Lyell Immunopharma and Merus BV
Given the investment horizon of 90 days Lyell Immunopharma is expected to generate 3.5 times more return on investment than Merus BV. However, Lyell Immunopharma is 3.5 times more volatile than Merus BV. It trades about 0.02 of its potential returns per unit of risk. Merus BV is currently generating about -0.24 per unit of risk. If you would invest 95.00 in Lyell Immunopharma on August 30, 2024 and sell it today you would lose (3.00) from holding Lyell Immunopharma or give up 3.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyell Immunopharma vs. Merus BV
Performance |
| Timeline |
| Lyell Immunopharma |
| Merus BV |
Lyell Immunopharma and Merus BV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyell Immunopharma and Merus BV
The main advantage of trading using opposite Lyell Immunopharma and Merus BV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyell Immunopharma position performs unexpectedly, Merus BV 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 Merus BV will offset losses from the drop in Merus BV's long position.| Lyell Immunopharma vs. Cullinan Oncology LLC | Lyell Immunopharma vs. Monte Rosa Therapeutics | Lyell Immunopharma vs. Revolution Medicines | Lyell Immunopharma vs. Nkarta Inc |
| Merus BV vs. Anebulo Pharmaceuticals | Merus BV vs. Adagene | Merus BV vs. Acrivon Therapeutics, Common | Merus BV vs. AnaptysBio |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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