Correlation Between PureTech Health and Merus BV
Can any of the company-specific risk be diversified away by investing in both PureTech Health 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 PureTech Health and Merus BV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PureTech Health PLC and Merus BV, you can compare the effects of market volatilities on PureTech Health 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 PureTech Health with a short position of Merus BV. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureTech Health and Merus BV.
Diversification Opportunities for PureTech Health and Merus BV
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PureTech and Merus is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding PureTech Health PLC and Merus BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merus BV and PureTech Health 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 PureTech Health PLC 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 PureTech Health i.e., PureTech Health and Merus BV go up and down completely randomly.
Pair Corralation between PureTech Health and Merus BV
Given the investment horizon of 90 days PureTech Health PLC is expected to generate 1.09 times more return on investment than Merus BV. However, PureTech Health is 1.09 times more volatile than Merus BV. It trades about -0.01 of its potential returns per unit of risk. Merus BV is currently generating about -0.09 per unit of risk. If you would invest 1,880 in PureTech Health PLC on November 4, 2024 and sell it today you would lose (24.00) from holding PureTech Health PLC or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PureTech Health PLC vs. Merus BV
Performance |
| Timeline |
| PureTech Health PLC |
| Merus BV |
PureTech Health and Merus BV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PureTech Health and Merus BV
The main advantage of trading using opposite PureTech Health and Merus BV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureTech Health 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.| PureTech Health vs. Molecular Partners AG | PureTech Health vs. MediciNova | PureTech Health vs. Anebulo Pharmaceuticals | PureTech Health vs. Champions Oncology |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |