Correlation Between Merck and Catalyst Biosciences
Can any of the company-specific risk be diversified away by investing in both Merck and Catalyst Biosciences 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 Merck and Catalyst Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Catalyst Biosciences, you can compare the effects of market volatilities on Merck and Catalyst Biosciences 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 Merck with a short position of Catalyst Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Catalyst Biosciences.
Diversification Opportunities for Merck and Catalyst Biosciences
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Catalyst is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Catalyst Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Biosciences and Merck 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 Merck Company are associated (or correlated) with Catalyst Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Biosciences has no effect on the direction of Merck i.e., Merck and Catalyst Biosciences go up and down completely randomly.
Pair Corralation between Merck and Catalyst Biosciences
If you would invest 41.00 in Catalyst Biosciences on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Catalyst Biosciences or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Merck Company vs. Catalyst Biosciences
Performance |
| Timeline |
| Merck Company |
| Catalyst Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Catalyst Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Catalyst Biosciences
The main advantage of trading using opposite Merck and Catalyst Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Catalyst Biosciences 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 Catalyst Biosciences will offset losses from the drop in Catalyst Biosciences' long position.| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
| Catalyst Biosciences vs. Akari Therapeutics PLC | Catalyst Biosciences vs. Benitec Biopharma Ltd | Catalyst Biosciences vs. Pulmatrix |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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