Correlation Between Maple Leaf and MERCK Kommanditgesells
Can any of the company-specific risk be diversified away by investing in both Maple Leaf 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 Maple Leaf and MERCK Kommanditgesells into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maple Leaf Green and MERCK Kommanditgesellschaft auf, you can compare the effects of market volatilities on Maple Leaf 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 Maple Leaf with a short position of MERCK Kommanditgesells. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and MERCK Kommanditgesells.
Diversification Opportunities for Maple Leaf and MERCK Kommanditgesells
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Maple and MERCK is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Green and MERCK Kommanditgesellschaft au in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MERCK Kommanditgesells and Maple Leaf 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 Maple Leaf Green 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 Maple Leaf i.e., Maple Leaf and MERCK Kommanditgesells go up and down completely randomly.
Pair Corralation between Maple Leaf and MERCK Kommanditgesells
Assuming the 90 days horizon Maple Leaf Green is expected to generate 11.8 times more return on investment than MERCK Kommanditgesells. However, Maple Leaf is 11.8 times more volatile than MERCK Kommanditgesellschaft auf. It trades about 0.09 of its potential returns per unit of risk. MERCK Kommanditgesellschaft auf is currently generating about -0.29 per unit of risk. If you would invest 3.50 in Maple Leaf Green on August 28, 2024 and sell it today you would lose (0.11) from holding Maple Leaf Green or give up 3.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Leaf Green vs. MERCK Kommanditgesellschaft au
Performance |
| Timeline |
| Maple Leaf Green |
| MERCK Kommanditgesells |
Maple Leaf and MERCK Kommanditgesells Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and MERCK Kommanditgesells
The main advantage of trading using opposite Maple Leaf and MERCK Kommanditgesells positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf 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.| Maple Leaf vs. Rezolute | Maple Leaf vs. Tempest Therapeutics | Maple Leaf vs. Forte Biosciences | Maple Leaf vs. Dyadic International |
| MERCK Kommanditgesells vs. Greater Cannabis | MERCK Kommanditgesells vs. Merck KGaA ADR | MERCK Kommanditgesells vs. For The Earth | MERCK Kommanditgesells vs. Indo Global Exchange |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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