Correlation Between Mereo BioPharma and Burning Rock
Can any of the company-specific risk be diversified away by investing in both Mereo BioPharma and Burning Rock 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 Mereo BioPharma and Burning Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mereo BioPharma Group and Burning Rock Biotech, you can compare the effects of market volatilities on Mereo BioPharma and Burning Rock 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 Mereo BioPharma with a short position of Burning Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mereo BioPharma and Burning Rock.
Diversification Opportunities for Mereo BioPharma and Burning Rock
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mereo and Burning is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Mereo BioPharma Group and Burning Rock Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burning Rock Biotech and Mereo BioPharma 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 Mereo BioPharma Group are associated (or correlated) with Burning Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burning Rock Biotech has no effect on the direction of Mereo BioPharma i.e., Mereo BioPharma and Burning Rock go up and down completely randomly.
Pair Corralation between Mereo BioPharma and Burning Rock
Given the investment horizon of 90 days Mereo BioPharma Group is expected to under-perform the Burning Rock. But the stock apears to be less risky and, when comparing its historical volatility, Mereo BioPharma Group is 1.0 times less risky than Burning Rock. The stock trades about -0.34 of its potential returns per unit of risk. The Burning Rock Biotech is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 650.00 in Burning Rock Biotech on October 25, 2024 and sell it today you would earn a total of 31.00 from holding Burning Rock Biotech or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Mereo BioPharma Group vs. Burning Rock Biotech
Performance |
| Timeline |
| Mereo BioPharma Group |
| Burning Rock Biotech |
Mereo BioPharma and Burning Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mereo BioPharma and Burning Rock
The main advantage of trading using opposite Mereo BioPharma and Burning Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mereo BioPharma position performs unexpectedly, Burning Rock 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 Burning Rock will offset losses from the drop in Burning Rock's long position.| Mereo BioPharma vs. Terns Pharmaceuticals | Mereo BioPharma vs. X4 Pharmaceuticals | Mereo BioPharma vs. Day One Biopharmaceuticals | Mereo BioPharma vs. Hookipa Pharma |
| Burning Rock vs. Fonar | Burning Rock vs. Sera Prognostics | Burning Rock vs. Neuronetics | Burning Rock vs. DarioHealth Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |