Correlation Between Mereo BioPharma and Inhibrx
Can any of the company-specific risk be diversified away by investing in both Mereo BioPharma and Inhibrx 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 Inhibrx 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 Inhibrx, you can compare the effects of market volatilities on Mereo BioPharma and Inhibrx 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 Inhibrx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mereo BioPharma and Inhibrx.
Diversification Opportunities for Mereo BioPharma and Inhibrx
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mereo and Inhibrx is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Mereo BioPharma Group and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx 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 Inhibrx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inhibrx has no effect on the direction of Mereo BioPharma i.e., Mereo BioPharma and Inhibrx go up and down completely randomly.
Pair Corralation between Mereo BioPharma and Inhibrx
Given the investment horizon of 90 days Mereo BioPharma Group is expected to under-perform the Inhibrx. In addition to that, Mereo BioPharma is 1.24 times more volatile than Inhibrx. It trades about -0.18 of its total potential returns per unit of risk. Inhibrx is currently generating about -0.03 per unit of volatility. If you would invest 1,580 in Inhibrx on September 2, 2024 and sell it today you would lose (54.00) from holding Inhibrx or give up 3.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mereo BioPharma Group vs. Inhibrx
Performance |
| Timeline |
| Mereo BioPharma Group |
| Inhibrx |
Mereo BioPharma and Inhibrx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mereo BioPharma and Inhibrx
The main advantage of trading using opposite Mereo BioPharma and Inhibrx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mereo BioPharma position performs unexpectedly, Inhibrx 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 Inhibrx will offset losses from the drop in Inhibrx's long position.| Mereo BioPharma vs. Terns Pharmaceuticals | Mereo BioPharma vs. PDS Biotechnology Corp | Mereo BioPharma vs. Inozyme Pharma | Mereo BioPharma vs. Hookipa Pharma |
| Inhibrx vs. Crinetics Pharmaceuticals | Inhibrx vs. Merus BV | Inhibrx vs. Lyell Immunopharma | Inhibrx vs. Kronos Bio |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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