Correlation Between Merck and Pardes Biosciences
Can any of the company-specific risk be diversified away by investing in both Merck and Pardes 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 Pardes 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 Pardes Biosciences, you can compare the effects of market volatilities on Merck and Pardes 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 Pardes Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Pardes Biosciences.
Diversification Opportunities for Merck and Pardes Biosciences
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merck and Pardes is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Pardes Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pardes 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 Pardes Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pardes Biosciences has no effect on the direction of Merck i.e., Merck and Pardes Biosciences go up and down completely randomly.
Pair Corralation between Merck and Pardes Biosciences
If you would invest 214.00 in Pardes Biosciences on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Pardes Biosciences or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Merck Company vs. Pardes Biosciences
Performance |
| Timeline |
| Merck Company |
| Pardes Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Pardes Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Pardes Biosciences
The main advantage of trading using opposite Merck and Pardes Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Pardes 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 Pardes Biosciences will offset losses from the drop in Pardes Biosciences' long position.| Merck vs. Capricor Therapeutics | Merck vs. Akari Therapeutics PLC | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings |
| Pardes Biosciences vs. Shattuck Labs | Pardes Biosciences vs. Eliem Therapeutics | Pardes Biosciences vs. Champions Oncology | Pardes Biosciences vs. Century Therapeutics |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |