Correlation Between Mereo BioPharma and Exicure

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

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

Diversification Opportunities for Mereo BioPharma and Exicure

0.55

Correlation Coefficient

Mereo BioPharma  Exicure

Very weak diversification

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

Pair Corralation between Mereo BioPharma and Exicure

Given the investment horizon of 90 days Mereo BioPharma Group is expected to generate 0.27 times more return on investment than Exicure. However, Mereo BioPharma Group is 3.64 times less risky than Exicure. It trades about -0.14 of its potential returns per unit of risk. Exicure is currently generating about -0.09 per unit of risk. If you would invest  361.00  in Mereo BioPharma Group on November 28, 2024 and sell it today you would lose (109.00) from holding Mereo BioPharma Group or give up 30.19% of portfolio value over 90 days.

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

Mereo BioPharma Group  vs.  Exicure

Mereo BioPharma Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mereo BioPharma Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Exicure

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exicure has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Mereo BioPharma and Exicure

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

The idea behind Mereo BioPharma Group and Exicure 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.