Correlation Between Mercedes Benz and BridgeBio Pharma,

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

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

Diversification Opportunities for Mercedes Benz and BridgeBio Pharma,

-0.24

Correlation Coefficient

Mercedes Benz  BridgeBio Pharma,

Very good diversification

The 3 months correlation between Mercedes and BridgeBio is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Mercedes Benz Group AG and BridgeBio Pharma, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BridgeBio Pharma, and Mercedes Benz 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 Mercedes Benz Group AG are associated (or correlated) with BridgeBio Pharma,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BridgeBio Pharma, has no effect on the direction of Mercedes Benz i.e., Mercedes Benz and BridgeBio Pharma, go up and down completely randomly.

Pair Corralation between Mercedes Benz and BridgeBio Pharma,

Assuming the 90 days horizon Mercedes Benz is expected to generate 6.55 times less return on investment than BridgeBio Pharma,. But when comparing it to its historical volatility, Mercedes Benz Group AG is 1.6 times less risky than BridgeBio Pharma,. It trades about 0.04 of its potential returns per unit of risk. BridgeBio Pharma, is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  3,060  in BridgeBio Pharma, on April 24, 2025 and sell it today you would earn a total of  817.00  from holding BridgeBio Pharma, or generate 26.7% return on investment over 90 days.

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

Mercedes Benz Group AG  vs.  BridgeBio Pharma,

Mercedes Benz Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mercedes Benz Group AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Mercedes Benz is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

BridgeBio Pharma,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BridgeBio Pharma, are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BridgeBio Pharma, reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mercedes Benz and BridgeBio Pharma,

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

The idea behind Mercedes Benz Group AG and BridgeBio Pharma, 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.