Correlation Between HANSOH PHARMAC and Merck
Can any of the company-specific risk be diversified away by investing in both HANSOH PHARMAC and Merck 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 HANSOH PHARMAC and Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANSOH PHARMAC HD 00001 and Merck Company, you can compare the effects of market volatilities on HANSOH PHARMAC and Merck 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 HANSOH PHARMAC with a short position of Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANSOH PHARMAC and Merck.
Diversification Opportunities for HANSOH PHARMAC and Merck
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between HANSOH and Merck is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding HANSOH PHARMAC HD 00001 and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company and HANSOH PHARMAC 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 HANSOH PHARMAC HD 00001 are associated (or correlated) with Merck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merck Company has no effect on the direction of HANSOH PHARMAC i.e., HANSOH PHARMAC and Merck go up and down completely randomly.
Pair Corralation between HANSOH PHARMAC and Merck
Assuming the 90 days horizon HANSOH PHARMAC is expected to generate 1.86 times less return on investment than Merck. In addition to that, HANSOH PHARMAC is 1.62 times more volatile than Merck Company. It trades about 0.09 of its total potential returns per unit of risk. Merck Company is currently generating about 0.27 per unit of volatility. If you would invest 13,890 in Merck Company on October 31, 2024 and sell it today you would earn a total of 1,135 from holding Merck Company or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HANSOH PHARMAC HD 00001 vs. Merck Company
Performance |
| Timeline |
| HANSOH PHARMAC HD |
| Merck Company |
HANSOH PHARMAC and Merck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HANSOH PHARMAC and Merck
The main advantage of trading using opposite HANSOH PHARMAC and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANSOH PHARMAC position performs unexpectedly, Merck 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 Merck will offset losses from the drop in Merck's long position.| HANSOH PHARMAC vs. HEALTHSTREAM | HANSOH PHARMAC vs. REINET INVESTMENTS SCA | HANSOH PHARMAC vs. NorAm Drilling AS | HANSOH PHARMAC vs. Molina Healthcare |
| Merck vs. Takeda Pharmaceutical | Merck vs. HANSOH PHARMAC HD 00001 | Merck vs. Guangzhou Baiyunshan Pharmaceutical | Merck vs. Elanco Animal Health |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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