Correlation Between Merus BV and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Merus BV and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merus BV and Dow Jones Industrial, you can compare the effects of market volatilities on Merus BV and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merus BV and Dow Jones.
Diversification Opportunities for Merus BV and Dow Jones
Good diversification
The 3 months correlation between Merus and Dow is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Merus BV and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Merus BV i.e., Merus BV and Dow Jones go up and down completely randomly.
Pair Corralation between Merus BV and Dow Jones
Given the investment horizon of 90 days Merus BV is expected to generate 3.09 times more return on investment than Dow Jones. However, Merus BV is 3.09 times more volatile than Dow Jones Industrial. It trades about 0.25 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.31 per unit of risk. If you would invest 4,064 in Merus BV on December 10, 2024 and sell it today you would earn a total of 611.00 from holding Merus BV or generate 15.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Merus BV vs. Dow Jones Industrial
Performance |
Timeline |
Merus BV and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Merus BV
Pair trading matchups for Merus BV
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Merus BV and Dow Jones
The main advantage of trading using opposite Merus BV and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merus BV position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.Merus BV vs. Anebulo Pharmaceuticals | Merus BV vs. Adagene | Merus BV vs. Acrivon Therapeutics, Common | Merus BV vs. AnaptysBio |
Dow Jones vs. The Gap, | Dow Jones vs. Corporacion America Airports | Dow Jones vs. Mesa Air Group | Dow Jones vs. National Vision Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |