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

0.0

Correlation Coefficient

Instil Bio  Merrimack Pharmaceuticals

Pay attention - limited upside

The 3 months correlation between Instil and Merrimack is 0.0. 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

If you would invest  2,061  in Instil Bio on December 20, 2024 and sell it today you would lose (90.00) from holding Instil Bio or give up 4.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Instil Bio  vs.  Merrimack Pharmaceuticals

Instil Bio

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Instil Bio are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Instil Bio may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Merrimack Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Merrimack Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Merrimack Pharmaceuticals is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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.

The idea behind Instil Bio and Merrimack Pharmaceuticals 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..