Correlation Between Mercedes Benz and Omeros
Can any of the company-specific risk be diversified away by investing in both Mercedes Benz and Omeros 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 Omeros 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 Omeros, you can compare the effects of market volatilities on Mercedes Benz and Omeros 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 Omeros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercedes Benz and Omeros.
Diversification Opportunities for Mercedes Benz and Omeros
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mercedes and Omeros is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mercedes Benz Group AG and Omeros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omeros 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 Omeros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omeros has no effect on the direction of Mercedes Benz i.e., Mercedes Benz and Omeros go up and down completely randomly.
Pair Corralation between Mercedes Benz and Omeros
Assuming the 90 days horizon Mercedes Benz Group AG is expected to generate 0.13 times more return on investment than Omeros. However, Mercedes Benz Group AG is 7.46 times less risky than Omeros. It trades about 0.06 of its potential returns per unit of risk. Omeros is currently generating about 0.01 per unit of risk. If you would invest 5,268 in Mercedes Benz Group AG on September 24, 2024 and sell it today you would earn a total of 89.00 from holding Mercedes Benz Group AG or generate 1.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mercedes Benz Group AG vs. Omeros
Performance |
Timeline |
Mercedes Benz Group |
Omeros |
Mercedes Benz and Omeros Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mercedes Benz and Omeros
The main advantage of trading using opposite Mercedes Benz and Omeros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercedes Benz position performs unexpectedly, Omeros 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 Omeros will offset losses from the drop in Omeros' long position.Mercedes Benz vs. Novo Nordisk AS | Mercedes Benz vs. CSL LTD SPONADR | Mercedes Benz vs. CSL Limited | Mercedes Benz vs. Vertex Pharmaceuticals Incorporated |
Omeros vs. Novo Nordisk AS | Omeros vs. CSL LTD SPONADR | Omeros vs. CSL Limited | Omeros vs. Mercedes Benz Group AG |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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