Correlation Between Day One and Merus BV
Can any of the company-specific risk be diversified away by investing in both Day One and Merus BV 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 Day One and Merus BV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Day One Biopharmaceuticals and Merus BV, you can compare the effects of market volatilities on Day One and Merus BV 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 Day One with a short position of Merus BV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Day One and Merus BV.
Diversification Opportunities for Day One and Merus BV
Very weak diversification
The 3 months correlation between Day and Merus is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Day One Biopharmaceuticals and Merus BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merus BV and Day One 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 Day One Biopharmaceuticals are associated (or correlated) with Merus BV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merus BV has no effect on the direction of Day One i.e., Day One and Merus BV go up and down completely randomly.
Pair Corralation between Day One and Merus BV
Given the investment horizon of 90 days Day One is expected to generate 2.18 times less return on investment than Merus BV. But when comparing it to its historical volatility, Day One Biopharmaceuticals is 1.03 times less risky than Merus BV. It trades about 0.03 of its potential returns per unit of risk. Merus BV is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,673 in Merus BV on August 28, 2024 and sell it today you would earn a total of 1,866 from holding Merus BV or generate 69.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Day One Biopharmaceuticals vs. Merus BV
Performance |
| Timeline |
| Day One Biopharmaceu |
| Merus BV |
Day One and Merus BV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Day One and Merus BV
The main advantage of trading using opposite Day One and Merus BV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Day One position performs unexpectedly, Merus BV 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 Merus BV will offset losses from the drop in Merus BV's long position.| Day One vs. X4 Pharmaceuticals | Day One vs. Inozyme Pharma | Day One vs. Acumen Pharmaceuticals | Day One vs. Mereo BioPharma Group |
| Merus BV vs. Anebulo Pharmaceuticals | Merus BV vs. Adagene | Merus BV vs. Acrivon Therapeutics, Common | Merus BV vs. AnaptysBio |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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