Correlation Between Blue Owl and VanEck Merk

Can any of the company-specific risk be diversified away by investing in both Blue Owl and VanEck Merk 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 Blue Owl and VanEck Merk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blue Owl Capital and VanEck Merk Gold, you can compare the effects of market volatilities on Blue Owl and VanEck Merk 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 Blue Owl with a short position of VanEck Merk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Owl and VanEck Merk.

Diversification Opportunities for Blue Owl and VanEck Merk

-0.46

Correlation Coefficient

Blue Owl  VanEck Merk

Very good diversification

The 3 months correlation between Blue and VanEck is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Blue Owl Capital and VanEck Merk Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Merk Gold and Blue Owl 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 Blue Owl Capital are associated (or correlated) with VanEck Merk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Merk Gold has no effect on the direction of Blue Owl i.e., Blue Owl and VanEck Merk go up and down completely randomly.

Pair Corralation between Blue Owl and VanEck Merk

Considering the 90-day investment horizon Blue Owl Capital is expected to under-perform the VanEck Merk. In addition to that, Blue Owl is 3.32 times more volatile than VanEck Merk Gold. It trades about -0.05 of its total potential returns per unit of risk. VanEck Merk Gold is currently generating about 0.3 per unit of volatility. If you would invest  2,523  in VanEck Merk Gold on December 27, 2024 and sell it today you would earn a total of  385.00  from holding VanEck Merk Gold or generate 15.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Blue Owl Capital  vs.  VanEck Merk Gold

Blue Owl Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blue Owl Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

VanEck Merk Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Merk Gold are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, VanEck Merk showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Owl and VanEck Merk

The main advantage of trading using opposite Blue Owl and VanEck Merk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Owl position performs unexpectedly, VanEck Merk 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 VanEck Merk will offset losses from the drop in VanEck Merk's long position.

The idea behind Blue Owl Capital and VanEck Merk Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.