Correlation Between Mersana Therapeutics and QXO,

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

By analyzing existing cross correlation between Mersana Therapeutics and QXO, Inc, you can compare the effects of market volatilities on Mersana Therapeutics and QXO, 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 Mersana Therapeutics with a short position of QXO,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mersana Therapeutics and QXO,.

Diversification Opportunities for Mersana Therapeutics and QXO,

0.55

Correlation Coefficient

Mersana Therapeutics  QXO,

Very weak diversification

The 3 months correlation between Mersana and QXO, is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mersana Therapeutics and QXO, Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QXO, Inc and Mersana Therapeutics 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 Mersana Therapeutics are associated (or correlated) with QXO,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QXO, Inc has no effect on the direction of Mersana Therapeutics i.e., Mersana Therapeutics and QXO, go up and down completely randomly.

Pair Corralation between Mersana Therapeutics and QXO,

Given the investment horizon of 90 days Mersana Therapeutics is expected to generate 2.73 times less return on investment than QXO,. But when comparing it to its historical volatility, Mersana Therapeutics is 3.28 times less risky than QXO,. It trades about 0.07 of its potential returns per unit of risk. QXO, Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,380  in QXO, Inc on July 9, 2024 and sell it today you would lose (982.00) from holding QXO, Inc or give up 41.26% of portfolio value over 90 days.

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

Mersana Therapeutics  vs.  QXO, Inc

Mersana Therapeutics

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mersana Therapeutics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Mersana Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

QXO, Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QXO, Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, QXO, is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mersana Therapeutics and QXO,

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

The idea behind Mersana Therapeutics and QXO, Inc 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.