Correlation Between Mersana Therapeutics and Viking Therapeutics
Can any of the company-specific risk be diversified away by investing in both Mersana Therapeutics and Viking Therapeutics 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 Mersana Therapeutics and Viking Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mersana Therapeutics and Viking Therapeutics, you can compare the effects of market volatilities on Mersana Therapeutics and Viking Therapeutics 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 Mersana Therapeutics with a short position of Viking Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mersana Therapeutics and Viking Therapeutics.
Diversification Opportunities for Mersana Therapeutics and Viking Therapeutics
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mersana and Viking is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Mersana Therapeutics and Viking Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Therapeutics and Mersana Therapeutics 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 Mersana Therapeutics are associated (or correlated) with Viking Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Therapeutics has no effect on the direction of Mersana Therapeutics i.e., Mersana Therapeutics and Viking Therapeutics go up and down completely randomly.
Pair Corralation between Mersana Therapeutics and Viking Therapeutics
Given the investment horizon of 90 days Mersana Therapeutics is expected to generate 6.37 times less return on investment than Viking Therapeutics. But when comparing it to its historical volatility, Mersana Therapeutics is 1.19 times less risky than Viking Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Viking Therapeutics is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 355.00 in Viking Therapeutics on September 2, 2024 and sell it today you would earn a total of 4,939 from holding Viking Therapeutics or generate 1391.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mersana Therapeutics vs. Viking Therapeutics
Performance |
| Timeline |
| Mersana Therapeutics |
| Viking Therapeutics |
Mersana Therapeutics and Viking Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mersana Therapeutics and Viking Therapeutics
The main advantage of trading using opposite Mersana Therapeutics and Viking Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mersana Therapeutics position performs unexpectedly, Viking Therapeutics 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 Viking Therapeutics will offset losses from the drop in Viking Therapeutics' long position.| Mersana Therapeutics vs. Terns Pharmaceuticals | Mersana Therapeutics vs. Amylyx Pharmaceuticals | Mersana Therapeutics vs. Acumen Pharmaceuticals | Mersana Therapeutics vs. Inozyme Pharma |
| Viking Therapeutics vs. Tff Pharmaceuticals | Viking Therapeutics vs. Eliem Therapeutics | Viking Therapeutics vs. Inhibrx | Viking Therapeutics vs. Enliven 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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