Correlation Between Sensei Biotherapeutics and Merrimack Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Sensei Biotherapeutics 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 Sensei Biotherapeutics and Merrimack Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensei Biotherapeutics and Merrimack Pharmaceuticals, you can compare the effects of market volatilities on Sensei Biotherapeutics 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 Sensei Biotherapeutics with a short position of Merrimack Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensei Biotherapeutics and Merrimack Pharmaceuticals.
Diversification Opportunities for Sensei Biotherapeutics and Merrimack Pharmaceuticals
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sensei and Merrimack is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sensei Biotherapeutics and Merrimack Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merrimack Pharmaceuticals and Sensei Biotherapeutics 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 Sensei Biotherapeutics 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 Sensei Biotherapeutics i.e., Sensei Biotherapeutics and Merrimack Pharmaceuticals go up and down completely randomly.
Pair Corralation between Sensei Biotherapeutics and Merrimack Pharmaceuticals
Given the investment horizon of 90 days Sensei Biotherapeutics is expected to generate 6.28 times more return on investment than Merrimack Pharmaceuticals. However, Sensei Biotherapeutics is 6.28 times more volatile than Merrimack Pharmaceuticals. It trades about 0.01 of its potential returns per unit of risk. Merrimack Pharmaceuticals is currently generating about 0.0 per unit of risk. If you would invest 160.00 in Sensei Biotherapeutics on August 28, 2024 and sell it today you would lose (100.00) from holding Sensei Biotherapeutics or give up 62.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 28.78% |
| Values | Daily Returns |
Sensei Biotherapeutics vs. Merrimack Pharmaceuticals
Performance |
| Timeline |
| Sensei Biotherapeutics |
| Merrimack Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sensei Biotherapeutics and Merrimack Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensei Biotherapeutics and Merrimack Pharmaceuticals
The main advantage of trading using opposite Sensei Biotherapeutics and Merrimack Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensei Biotherapeutics 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.| Sensei Biotherapeutics vs. Eliem Therapeutics | Sensei Biotherapeutics vs. Scpharmaceuticals | Sensei Biotherapeutics vs. Milestone Pharmaceuticals | Sensei Biotherapeutics vs. Seres Therapeutics |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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