Correlation Between Merus BV and Werewolf Therapeutics
Can any of the company-specific risk be diversified away by investing in both Merus BV and Werewolf Therapeutics 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 Merus BV and Werewolf Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merus BV and Werewolf Therapeutics, you can compare the effects of market volatilities on Merus BV and Werewolf Therapeutics 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 Merus BV with a short position of Werewolf Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merus BV and Werewolf Therapeutics.
Diversification Opportunities for Merus BV and Werewolf Therapeutics
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Merus and Werewolf is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Merus BV and Werewolf Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Werewolf Therapeutics and Merus BV 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 Merus BV are associated (or correlated) with Werewolf Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Werewolf Therapeutics has no effect on the direction of Merus BV i.e., Merus BV and Werewolf Therapeutics go up and down completely randomly.
Pair Corralation between Merus BV and Werewolf Therapeutics
Given the investment horizon of 90 days Merus BV is expected to generate 0.69 times more return on investment than Werewolf Therapeutics. However, Merus BV is 1.46 times less risky than Werewolf Therapeutics. It trades about -0.12 of its potential returns per unit of risk. Werewolf Therapeutics is currently generating about -0.21 per unit of risk. If you would invest 4,209 in Merus BV on October 20, 2024 and sell it today you would lose (264.00) from holding Merus BV or give up 6.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merus BV vs. Werewolf Therapeutics
Performance |
| Timeline |
| Merus BV |
| Werewolf Therapeutics |
Merus BV and Werewolf Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merus BV and Werewolf Therapeutics
The main advantage of trading using opposite Merus BV and Werewolf Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merus BV position performs unexpectedly, Werewolf Therapeutics 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 Werewolf Therapeutics will offset losses from the drop in Werewolf Therapeutics' long position.| Merus BV vs. Anebulo Pharmaceuticals | Merus BV vs. Adagene | Merus BV vs. Acrivon Therapeutics, Common | Merus BV vs. AnaptysBio |
| Werewolf Therapeutics vs. Monte Rosa Therapeutics | Werewolf Therapeutics vs. Design Therapeutics | Werewolf Therapeutics vs. Ikena Oncology | Werewolf Therapeutics vs. Stoke Therapeutics |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |