Correlation Between MERCK Kommanditgesells and Elixinol Global
Can any of the company-specific risk be diversified away by investing in both MERCK Kommanditgesells and Elixinol Global 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 Elixinol Global 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 Elixinol Global, you can compare the effects of market volatilities on MERCK Kommanditgesells and Elixinol Global 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 Elixinol Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of MERCK Kommanditgesells and Elixinol Global.
Diversification Opportunities for MERCK Kommanditgesells and Elixinol Global
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MERCK and Elixinol is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding MERCK Kommanditgesellschaft au and Elixinol Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elixinol Global 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 Elixinol Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elixinol Global has no effect on the direction of MERCK Kommanditgesells i.e., MERCK Kommanditgesells and Elixinol Global go up and down completely randomly.
Pair Corralation between MERCK Kommanditgesells and Elixinol Global
Assuming the 90 days horizon MERCK Kommanditgesellschaft auf is expected to under-perform the Elixinol Global. But the pink sheet apears to be less risky and, when comparing its historical volatility, MERCK Kommanditgesellschaft auf is 24.81 times less risky than Elixinol Global. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Elixinol Global is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1.36 in Elixinol Global on August 28, 2024 and sell it today you would lose (1.04) from holding Elixinol Global or give up 76.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
MERCK Kommanditgesellschaft au vs. Elixinol Global
Performance |
| Timeline |
| MERCK Kommanditgesells |
| Elixinol Global |
MERCK Kommanditgesells and Elixinol Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MERCK Kommanditgesells and Elixinol Global
The main advantage of trading using opposite MERCK Kommanditgesells and Elixinol Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MERCK Kommanditgesells position performs unexpectedly, Elixinol Global 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 Elixinol Global will offset losses from the drop in Elixinol Global's 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 |
| Elixinol Global vs. Pharmadrug | Elixinol Global vs. Livewire Ergogenics | Elixinol Global vs. Agra Ventures | Elixinol Global vs. BellRock Brands |
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 CEOs Directory module to screen CEOs from public companies around the world.
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