Correlation Between NYSE Composite and Merrimack Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Merrimack Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Merrimack Pharmaceuticals, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Merrimack Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Merrimack Pharmaceuticals.
Diversification Opportunities for NYSE Composite and Merrimack Pharmaceuticals
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Merrimack is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Merrimack Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merrimack Pharmaceuticals and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Merrimack Pharmaceuticals go up and down completely randomly.
Pair Corralation between NYSE Composite and Merrimack Pharmaceuticals
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.63 times more return on investment than Merrimack Pharmaceuticals. However, NYSE Composite is 1.58 times less risky than Merrimack Pharmaceuticals. It trades about 0.11 of its potential returns per unit of risk. Merrimack Pharmaceuticals is currently generating about -0.14 per unit of risk. If you would invest 1,539,127 in NYSE Composite on August 29, 2024 and sell it today you would earn a total of 482,818 from holding NYSE Composite or generate 31.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 13.74% |
| Values | Daily Returns |
NYSE Composite vs. Merrimack Pharmaceuticals
Performance |
| Timeline |
NYSE Composite and Merrimack Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Merrimack Pharmaceuticals
Pair trading matchups for Merrimack Pharmaceuticals
Pair Trading with NYSE Composite and Merrimack Pharmaceuticals
The main advantage of trading using opposite NYSE Composite and Merrimack Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |