Correlation Between American Express and MERCK
Specify exactly 2 symbols:
By analyzing existing cross correlation between American Express and MERCK INC, you can compare the effects of market volatilities on American Express 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 American Express with a short position of MERCK. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and MERCK.
Diversification Opportunities for American Express and MERCK
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and MERCK is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding American Express and MERCK INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MERCK INC and American Express 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 American Express 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 INC has no effect on the direction of American Express i.e., American Express and MERCK go up and down completely randomly.
Pair Corralation between American Express and MERCK
Considering the 90-day investment horizon American Express is expected to generate 2.29 times more return on investment than MERCK. However, American Express is 2.29 times more volatile than MERCK INC. It trades about 0.25 of its potential returns per unit of risk. MERCK INC is currently generating about -0.19 per unit of risk. If you would invest 27,408 in American Express on August 31, 2024 and sell it today you would earn a total of 3,060 from holding American Express or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
American Express vs. MERCK INC
Performance |
| Timeline |
| American Express |
| MERCK INC |
American Express and MERCK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and MERCK
The main advantage of trading using opposite American Express and MERCK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express 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.| American Express vs. Visa Class A | American Express vs. RLJ Lodging Trust | American Express vs. Aquagold International | American Express vs. Stepstone 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |