Correlation Between Nuvation Bio and Merrimack Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Nuvation Bio and Merrimack Pharmaceuticals 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 Nuvation Bio and Merrimack Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuvation Bio and Merrimack Pharmaceuticals, you can compare the effects of market volatilities on Nuvation Bio and Merrimack Pharmaceuticals 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 Nuvation Bio with a short position of Merrimack Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuvation Bio and Merrimack Pharmaceuticals.
Diversification Opportunities for Nuvation Bio and Merrimack Pharmaceuticals
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nuvation and Merrimack is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Nuvation Bio and Merrimack Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merrimack Pharmaceuticals and Nuvation Bio 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 Nuvation Bio are associated (or correlated) with Merrimack Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merrimack Pharmaceuticals has no effect on the direction of Nuvation Bio i.e., Nuvation Bio and Merrimack Pharmaceuticals go up and down completely randomly.
Pair Corralation between Nuvation Bio and Merrimack Pharmaceuticals
Given the investment horizon of 90 days Nuvation Bio is expected to generate 4.15 times more return on investment than Merrimack Pharmaceuticals. However, Nuvation Bio is 4.15 times more volatile than Merrimack Pharmaceuticals. It trades about 0.03 of its potential returns per unit of risk. Merrimack Pharmaceuticals is currently generating about 0.01 per unit of risk. If you would invest 240.00 in Nuvation Bio on October 25, 2024 and sell it today you would earn a total of 36.00 from holding Nuvation Bio or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 23.89% |
| Values | Daily Returns |
Nuvation Bio vs. Merrimack Pharmaceuticals
Performance |
| Timeline |
| Nuvation Bio |
| Merrimack Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nuvation Bio and Merrimack Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuvation Bio and Merrimack Pharmaceuticals
The main advantage of trading using opposite Nuvation Bio and Merrimack Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuvation Bio position performs unexpectedly, Merrimack Pharmaceuticals 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 Merrimack Pharmaceuticals will offset losses from the drop in Merrimack Pharmaceuticals' long position.| Nuvation Bio vs. Assembly Biosciences | Nuvation Bio vs. Instil Bio | Nuvation Bio vs. Achilles Therapeutics PLC | Nuvation Bio vs. NextCure |
| Merrimack Pharmaceuticals vs. Amicus Therapeutics | Merrimack Pharmaceuticals vs. Celldex Therapeutics | Merrimack Pharmaceuticals vs. Puma Biotechnology | Merrimack Pharmaceuticals vs. Agios Pharm |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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