Correlation Between Instil Bio and Merrimack Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Instil 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 Instil 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 Instil Bio and Merrimack Pharmaceuticals, you can compare the effects of market volatilities on Instil 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 Instil Bio with a short position of Merrimack Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Instil Bio and Merrimack Pharmaceuticals.
Diversification Opportunities for Instil Bio and Merrimack Pharmaceuticals
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Instil and Merrimack is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Instil Bio and Merrimack Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merrimack Pharmaceuticals and Instil 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 Instil 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 Instil Bio i.e., Instil Bio and Merrimack Pharmaceuticals go up and down completely randomly.
Pair Corralation between Instil Bio and Merrimack Pharmaceuticals
Considering the 90-day investment horizon Instil Bio is expected to generate 6.3 times more return on investment than Merrimack Pharmaceuticals. However, Instil Bio is 6.3 times more volatile than Merrimack Pharmaceuticals. It trades about 0.04 of its potential returns per unit of risk. Merrimack Pharmaceuticals is currently generating about 0.01 per unit of risk. If you would invest 1,780 in Instil Bio on October 25, 2024 and sell it today you would earn a total of 640.00 from holding Instil Bio or generate 35.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 23.89% |
| Values | Daily Returns |
Instil Bio vs. Merrimack Pharmaceuticals
Performance |
| Timeline |
| Instil Bio |
| Merrimack Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Instil Bio and Merrimack Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Instil Bio and Merrimack Pharmaceuticals
The main advantage of trading using opposite Instil Bio and Merrimack Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Instil 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.| Instil Bio vs. Assembly Biosciences | Instil Bio vs. Nuvation Bio | Instil Bio vs. Achilles Therapeutics PLC | Instil Bio vs. NextCure |
| Merrimack Pharmaceuticals vs. Amicus 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |