Correlation Between GobiMin and Merck KGaA
Can any of the company-specific risk be diversified away by investing in both GobiMin and Merck KGaA 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 GobiMin and Merck KGaA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GobiMin and Merck KGaA ADR, you can compare the effects of market volatilities on GobiMin and Merck KGaA 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 GobiMin with a short position of Merck KGaA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GobiMin and Merck KGaA.
Diversification Opportunities for GobiMin and Merck KGaA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GobiMin and Merck is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GobiMin and Merck KGaA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck KGaA ADR and GobiMin 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 GobiMin are associated (or correlated) with Merck KGaA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merck KGaA ADR has no effect on the direction of GobiMin i.e., GobiMin and Merck KGaA go up and down completely randomly.
Pair Corralation between GobiMin and Merck KGaA
If you would invest 127.00 in GobiMin on August 30, 2024 and sell it today you would earn a total of 0.00 from holding GobiMin or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
GobiMin vs. Merck KGaA ADR
Performance |
| Timeline |
| GobiMin |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Merck KGaA ADR |
GobiMin and Merck KGaA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GobiMin and Merck KGaA
The main advantage of trading using opposite GobiMin and Merck KGaA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GobiMin position performs unexpectedly, Merck KGaA 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 KGaA will offset losses from the drop in Merck KGaA's long position.| GobiMin vs. Pintec Technology Holdings | GobiMin vs. Willamette Valley Vineyards | GobiMin vs. Molson Coors Brewing | GobiMin vs. AmTrust Financial Services |
| Merck KGaA vs. Fresenius SE Co | Merck KGaA vs. Straumann Holding AG | Merck KGaA vs. MERCK Kommanditgesellschaft auf |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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