Correlation Between SP Merval and Merck
Can any of the company-specific risk be diversified away by investing in both SP Merval 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 SP Merval and Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Merval and Merck Company, you can compare the effects of market volatilities on SP Merval 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 SP Merval with a short position of Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Merval and Merck.
Diversification Opportunities for SP Merval and Merck
Pay attention - limited upside
The 3 months correlation between MERV and Merck is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SP Merval and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company and SP Merval 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 SP Merval 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 SP Merval i.e., SP Merval and Merck go up and down completely randomly.
Pair Corralation between SP Merval and Merck
If you would invest 100,000,000 in SP Merval on August 28, 2024 and sell it today you would earn a total of 0.00 from holding SP Merval or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SP Merval vs. Merck Company
Performance |
| Timeline |
SP Merval and Merck Volatility Contrast
Predicted Return Density |
| Returns |
SP Merval
Pair trading matchups for SP Merval
Merck Company
Pair trading matchups for Merck
Pair Trading with SP Merval and Merck
The main advantage of trading using opposite SP Merval and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Merval 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.| SP Merval vs. Harmony Gold Mining | SP Merval vs. United States Steel | SP Merval vs. Agrometal SAI | SP Merval vs. Compania de Transporte |
| Merck vs. Agrometal SAI | Merck vs. Compania de Transporte | Merck vs. Telecom Argentina | Merck vs. Harmony Gold Mining |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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