Correlation Between MERCK Kommanditgesells and Antisense Therapeutics

Can any of the company-specific risk be diversified away by investing in both MERCK Kommanditgesells and Antisense 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 MERCK Kommanditgesells and Antisense Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MERCK Kommanditgesellschaft auf and Antisense Therapeutics Limited, you can compare the effects of market volatilities on MERCK Kommanditgesells and Antisense 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 MERCK Kommanditgesells with a short position of Antisense Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of MERCK Kommanditgesells and Antisense Therapeutics.

Diversification Opportunities for MERCK Kommanditgesells and Antisense Therapeutics

-0.56

Correlation Coefficient

MERCK Kommanditgesells  Antisense Therapeutics

Excellent diversification

The 3 months correlation between MERCK and Antisense is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding MERCK Kommanditgesellschaft au and Antisense Therapeutics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antisense Therapeutics and MERCK Kommanditgesells 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 MERCK Kommanditgesellschaft auf are associated (or correlated) with Antisense Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antisense Therapeutics has no effect on the direction of MERCK Kommanditgesells i.e., MERCK Kommanditgesells and Antisense Therapeutics go up and down completely randomly.

Pair Corralation between MERCK Kommanditgesells and Antisense Therapeutics

Assuming the 90 days horizon MERCK Kommanditgesellschaft auf is expected to generate 0.42 times more return on investment than Antisense Therapeutics. However, MERCK Kommanditgesellschaft auf is 2.39 times less risky than Antisense Therapeutics. It trades about -0.29 of its potential returns per unit of risk. Antisense Therapeutics Limited is currently generating about -0.32 per unit of risk. If you would invest  16,157  in MERCK Kommanditgesellschaft auf on September 1, 2024 and sell it today you would lose (1,682) from holding MERCK Kommanditgesellschaft auf or give up 10.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

MERCK Kommanditgesellschaft au  vs.  Antisense Therapeutics Limited

MERCK Kommanditgesells

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MERCK Kommanditgesellschaft auf has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Antisense Therapeutics

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Antisense Therapeutics Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady forward-looking indicators, Antisense Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MERCK Kommanditgesells and Antisense Therapeutics

The main advantage of trading using opposite MERCK Kommanditgesells and Antisense Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MERCK Kommanditgesells position performs unexpectedly, Antisense 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 Antisense Therapeutics will offset losses from the drop in Antisense Therapeutics' long position.

The idea behind MERCK Kommanditgesellschaft auf and Antisense Therapeutics Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 CEOs Directory module to screen CEOs from public companies around the world.