Correlation Between Brainstorm Cell and Merck
Can any of the company-specific risk be diversified away by investing in both Brainstorm Cell 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 Brainstorm Cell and Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brainstorm Cell Therapeutics and Merck Co, you can compare the effects of market volatilities on Brainstorm Cell 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 Brainstorm Cell with a short position of Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brainstorm Cell and Merck.
Diversification Opportunities for Brainstorm Cell and Merck
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brainstorm and Merck is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Brainstorm Cell Therapeutics and Merck Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck and Brainstorm Cell 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 Brainstorm Cell Therapeutics 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 has no effect on the direction of Brainstorm Cell i.e., Brainstorm Cell and Merck go up and down completely randomly.
Pair Corralation between Brainstorm Cell and Merck
If you would invest 9,440 in Merck Co on September 1, 2024 and sell it today you would earn a total of 260.00 from holding Merck Co or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Brainstorm Cell Therapeutics vs. Merck Co
Performance |
| Timeline |
| Brainstorm Cell Ther |
| Merck |
Brainstorm Cell and Merck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brainstorm Cell and Merck
The main advantage of trading using opposite Brainstorm Cell and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brainstorm Cell 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.| Brainstorm Cell vs. Scientific Games | Brainstorm Cell vs. AXWAY SOFTWARE EO | Brainstorm Cell vs. Boyd Gaming | Brainstorm Cell vs. FORMPIPE SOFTWARE AB |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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