Correlation Between YS Biopharma and Merck

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both YS Biopharma and Merck 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 YS Biopharma and Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YS Biopharma Co and Merck Company, you can compare the effects of market volatilities on YS Biopharma and Merck 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 YS Biopharma with a short position of Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of YS Biopharma and Merck.

Diversification Opportunities for YS Biopharma and Merck

0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between YS Biopharma and Merck is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding YS Biopharma Co and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company and YS Biopharma 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 YS Biopharma Co are associated (or correlated) with Merck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merck Company has no effect on the direction of YS Biopharma i.e., YS Biopharma and Merck go up and down completely randomly.

Pair Corralation between YS Biopharma and Merck

Allowing for the 90-day total investment horizon YS Biopharma Co is expected to generate 3.95 times more return on investment than Merck. However, YS Biopharma is 3.95 times more volatile than Merck Company. It trades about 0.4 of its potential returns per unit of risk. Merck Company is currently generating about 0.05 per unit of risk. If you would invest  63.00  in YS Biopharma Co on January 20, 2024 and sell it today you would earn a total of  31.00  from holding YS Biopharma Co or generate 49.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

YS Biopharma Co  vs.  Merck Company

 Performance 
       Timeline  
YS Biopharma 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in YS Biopharma Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, YS Biopharma unveiled solid returns over the last few months and may actually be approaching a breakup point.
Merck Company 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Merck Company are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Merck is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

YS Biopharma and Merck Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with YS Biopharma and Merck

The main advantage of trading using opposite YS Biopharma and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YS Biopharma position performs unexpectedly, Merck 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 Merck will offset losses from the drop in Merck's long position.
The idea behind YS Biopharma Co and Merck Company 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.
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

Other Complementary Tools

Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities