Correlation Between Kronos Bio and Merus BV
Can any of the company-specific risk be diversified away by investing in both Kronos Bio 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 Kronos Bio and Merus BV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kronos Bio and Merus BV, you can compare the effects of market volatilities on Kronos Bio 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 Kronos Bio with a short position of Merus BV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kronos Bio and Merus BV.
Diversification Opportunities for Kronos Bio and Merus BV
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kronos and Merus is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kronos Bio and Merus BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merus BV and Kronos 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 Kronos Bio 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 Kronos Bio i.e., Kronos Bio and Merus BV go up and down completely randomly.
Pair Corralation between Kronos Bio and Merus BV
Given the investment horizon of 90 days Kronos Bio is expected to generate 0.95 times more return on investment than Merus BV. However, Kronos Bio is 1.05 times less risky than Merus BV. It trades about 0.14 of its potential returns per unit of risk. Merus BV is currently generating about -0.12 per unit of risk. If you would invest 93.00 in Kronos Bio on October 20, 2024 and sell it today you would earn a total of 6.00 from holding Kronos Bio or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kronos Bio vs. Merus BV
Performance |
| Timeline |
| Kronos Bio |
| Merus BV |
Kronos Bio and Merus BV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kronos Bio and Merus BV
The main advantage of trading using opposite Kronos Bio and Merus BV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kronos Bio 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.| Kronos Bio vs. Cyclerion Therapeutics | Kronos Bio vs. Larimar Therapeutics | Kronos Bio vs. Addex Therapeutics | Kronos Bio vs. Achilles Therapeutics PLC |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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