Correlation Between MERCK Kommanditgesells and AYR Strategies
Can any of the company-specific risk be diversified away by investing in both MERCK Kommanditgesells and AYR Strategies 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 MERCK Kommanditgesells and AYR Strategies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MERCK Kommanditgesellschaft auf and AYR Strategies Class, you can compare the effects of market volatilities on MERCK Kommanditgesells and AYR Strategies 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 MERCK Kommanditgesells with a short position of AYR Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of MERCK Kommanditgesells and AYR Strategies.
Diversification Opportunities for MERCK Kommanditgesells and AYR Strategies
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MERCK and AYR is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding MERCK Kommanditgesellschaft au and AYR Strategies Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AYR Strategies Class and MERCK Kommanditgesells 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 MERCK Kommanditgesellschaft auf are associated (or correlated) with AYR Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AYR Strategies Class has no effect on the direction of MERCK Kommanditgesells i.e., MERCK Kommanditgesells and AYR Strategies go up and down completely randomly.
Pair Corralation between MERCK Kommanditgesells and AYR Strategies
Assuming the 90 days horizon MERCK Kommanditgesells is expected to generate 4.04 times less return on investment than AYR Strategies. But when comparing it to its historical volatility, MERCK Kommanditgesellschaft auf is 3.6 times less risky than AYR Strategies. It trades about 0.15 of its potential returns per unit of risk. AYR Strategies Class is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 41.00 in AYR Strategies Class on October 22, 2024 and sell it today you would earn a total of 9.00 from holding AYR Strategies Class or generate 21.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MERCK Kommanditgesellschaft au vs. AYR Strategies Class
Performance |
| Timeline |
| MERCK Kommanditgesells |
| AYR Strategies Class |
MERCK Kommanditgesells and AYR Strategies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MERCK Kommanditgesells and AYR Strategies
The main advantage of trading using opposite MERCK Kommanditgesells and AYR Strategies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MERCK Kommanditgesells position performs unexpectedly, AYR Strategies 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 AYR Strategies will offset losses from the drop in AYR Strategies' long position.| MERCK Kommanditgesells vs. Greater Cannabis | MERCK Kommanditgesells vs. Merck KGaA ADR | MERCK Kommanditgesells vs. For The Earth | MERCK Kommanditgesells vs. Indo Global Exchange |
| AYR Strategies vs. Green Thumb Industries | AYR Strategies vs. Trulieve Cannabis Corp | AYR Strategies vs. Goodness Growth Holdings | AYR Strategies vs. Verano Holdings Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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