Correlation Between Impax Asset and MERCK Kommanditgesells
Can any of the company-specific risk be diversified away by investing in both Impax Asset and MERCK Kommanditgesells 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 Impax Asset and MERCK Kommanditgesells into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Asset Management and MERCK Kommanditgesellschaft auf, you can compare the effects of market volatilities on Impax Asset and MERCK Kommanditgesells 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 Impax Asset with a short position of MERCK Kommanditgesells. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Asset and MERCK Kommanditgesells.
Diversification Opportunities for Impax Asset and MERCK Kommanditgesells
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Impax and MERCK is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Impax Asset Management and MERCK Kommanditgesellschaft au in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MERCK Kommanditgesells and Impax Asset 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 Impax Asset Management are associated (or correlated) with MERCK Kommanditgesells. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MERCK Kommanditgesells has no effect on the direction of Impax Asset i.e., Impax Asset and MERCK Kommanditgesells go up and down completely randomly.
Pair Corralation between Impax Asset and MERCK Kommanditgesells
Assuming the 90 days trading horizon Impax Asset Management is expected to under-perform the MERCK Kommanditgesells. In addition to that, Impax Asset is 1.92 times more volatile than MERCK Kommanditgesellschaft auf. It trades about -0.11 of its total potential returns per unit of risk. MERCK Kommanditgesellschaft auf is currently generating about -0.16 per unit of volatility. If you would invest 14,310 in MERCK Kommanditgesellschaft auf on January 16, 2025 and sell it today you would lose (2,515) from holding MERCK Kommanditgesellschaft auf or give up 17.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Impax Asset Management vs. MERCK Kommanditgesellschaft au
Performance |
| Timeline |
| Impax Asset Management |
| MERCK Kommanditgesells |
Impax Asset and MERCK Kommanditgesells Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Asset and MERCK Kommanditgesells
The main advantage of trading using opposite Impax Asset and MERCK Kommanditgesells positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Asset position performs unexpectedly, MERCK Kommanditgesells 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 Kommanditgesells will offset losses from the drop in MERCK Kommanditgesells' long position.| Impax Asset vs. Gamma Communications PLC | Impax Asset vs. Endeavour Mining Corp | Impax Asset vs. Verizon Communications | Impax Asset vs. Batm Advanced Communications |
| MERCK Kommanditgesells vs. Raytheon Technologies Corp | MERCK Kommanditgesells vs. TT Electronics Plc | MERCK Kommanditgesells vs. Electronic Arts | MERCK Kommanditgesells vs. Associated British Foods |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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