Correlation Between Edesa Holding and Merck
Can any of the company-specific risk be diversified away by investing in both Edesa Holding 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 Edesa Holding and Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edesa Holding SA and Merck Company, you can compare the effects of market volatilities on Edesa Holding 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 Edesa Holding with a short position of Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edesa Holding and Merck.
Diversification Opportunities for Edesa Holding and Merck
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Edesa and Merck is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Edesa Holding SA and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company and Edesa Holding 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 Edesa Holding SA 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 Edesa Holding i.e., Edesa Holding and Merck go up and down completely randomly.
Pair Corralation between Edesa Holding and Merck
If you would invest 2,137,484 in Merck Company on September 19, 2024 and sell it today you would earn a total of 165,016 from holding Merck Company or generate 7.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Edesa Holding SA vs. Merck Company
Performance |
| Timeline |
| Edesa Holding SA |
| Merck Company |
Edesa Holding and Merck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edesa Holding and Merck
The main advantage of trading using opposite Edesa Holding and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edesa Holding 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.| Edesa Holding vs. Enel Generacion Costanera | Edesa Holding vs. Vista Energy, SAB | Edesa Holding vs. United States Steel | Edesa Holding vs. Pfizer Inc |
| Merck vs. Edesa Holding SA | Merck vs. Vista Energy, SAB | Merck vs. United States Steel | Merck vs. Central Puerto SA |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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