Correlation Between ACS Actividades and Merck
Can any of the company-specific risk be diversified away by investing in both ACS Actividades 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 ACS Actividades and Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACS Actividades de and Merck Company, you can compare the effects of market volatilities on ACS Actividades 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 ACS Actividades with a short position of Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACS Actividades and Merck.
Diversification Opportunities for ACS Actividades and Merck
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ACS and Merck is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding ACS Actividades de and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company and ACS Actividades 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 ACS Actividades de 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 ACS Actividades i.e., ACS Actividades and Merck go up and down completely randomly.
Pair Corralation between ACS Actividades and Merck
Assuming the 90 days trading horizon ACS Actividades de is expected to generate 1.03 times more return on investment than Merck. However, ACS Actividades is 1.03 times more volatile than Merck Company. It trades about 0.47 of its potential returns per unit of risk. Merck Company is currently generating about 0.22 per unit of risk. If you would invest 4,142 in ACS Actividades de on September 18, 2024 and sell it today you would earn a total of 644.00 from holding ACS Actividades de or generate 15.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACS Actividades de vs. Merck Company
Performance |
| Timeline |
| ACS Actividades de |
| Merck Company |
ACS Actividades and Merck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACS Actividades and Merck
The main advantage of trading using opposite ACS Actividades and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACS Actividades 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.| ACS Actividades vs. Universal Music Group | ACS Actividades vs. SBM Offshore NV | ACS Actividades vs. AMAG Austria Metall | ACS Actividades vs. UNIQA Insurance Group |
| Merck vs. Vienna Insurance Group | Merck vs. Oberbank AG | Merck vs. CNH Industrial NV | Merck vs. Universal Music Group |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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