Correlation Between Merck and Immutep
Can any of the company-specific risk be diversified away by investing in both Merck and Immutep 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 Immutep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Immutep Ltd ADR, you can compare the effects of market volatilities on Merck and Immutep 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 Immutep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Immutep.
Diversification Opportunities for Merck and Immutep
Poor diversification
The 3 months correlation between Merck and Immutep is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Immutep Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immutep Ltd ADR 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 Immutep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immutep Ltd ADR has no effect on the direction of Merck i.e., Merck and Immutep go up and down completely randomly.
Pair Corralation between Merck and Immutep
Considering the 90-day investment horizon Merck is expected to generate 55.55 times less return on investment than Immutep. But when comparing it to its historical volatility, Merck Company is 3.81 times less risky than Immutep. It trades about 0.0 of its potential returns per unit of risk. Immutep Ltd ADR is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 236.00 in Immutep Ltd ADR on August 29, 2024 and sell it today you would lose (45.00) from holding Immutep Ltd ADR or give up 19.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Merck Company vs. Immutep Ltd ADR
Performance |
| Timeline |
| Merck Company |
| Immutep Ltd ADR |
Merck and Immutep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Immutep
The main advantage of trading using opposite Merck and Immutep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Immutep 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 Immutep will offset losses from the drop in Immutep's long position.| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
| Immutep vs. Ocean Biomedical | Immutep vs. Elevation Oncology | Immutep vs. Zura Bio Limited | Immutep vs. Cns Pharmaceuticals |
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 Stocks Directory module to find actively traded stocks across global markets.
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