Correlation Between Mereo BioPharma and Curis
Can any of the company-specific risk be diversified away by investing in both Mereo BioPharma and Curis 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 Curis 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 Curis Inc, you can compare the effects of market volatilities on Mereo BioPharma and Curis 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 Curis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mereo BioPharma and Curis.
Diversification Opportunities for Mereo BioPharma and Curis
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mereo and Curis is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mereo BioPharma Group and Curis Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curis Inc 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 Curis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curis Inc has no effect on the direction of Mereo BioPharma i.e., Mereo BioPharma and Curis go up and down completely randomly.
Pair Corralation between Mereo BioPharma and Curis
Given the investment horizon of 90 days Mereo BioPharma Group is expected to under-perform the Curis. But the stock apears to be less risky and, when comparing its historical volatility, Mereo BioPharma Group is 1.04 times less risky than Curis. The stock trades about -0.15 of its potential returns per unit of risk. The Curis Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 317.00 in Curis Inc on November 27, 2024 and sell it today you would lose (7.00) from holding Curis Inc or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mereo BioPharma Group vs. Curis Inc
Performance |
| Timeline |
| Mereo BioPharma Group |
| Curis Inc |
Mereo BioPharma and Curis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mereo BioPharma and Curis
The main advantage of trading using opposite Mereo BioPharma and Curis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mereo BioPharma position performs unexpectedly, Curis 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 Curis will offset losses from the drop in Curis' long position.| Mereo BioPharma vs. Terns Pharmaceuticals | Mereo BioPharma vs. PDS Biotechnology Corp | Mereo BioPharma vs. Inozyme Pharma | Mereo BioPharma vs. Hookipa Pharma |
| Curis vs. Artelo Biosciences | Curis vs. X4 Pharmaceuticals | Curis vs. Mereo BioPharma Group | Curis 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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