Correlation Between Victory Integrity and Merck
Can any of the company-specific risk be diversified away by investing in both Victory Integrity 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 Victory Integrity and Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory Integrity Smallmid Cap and Merck Company, you can compare the effects of market volatilities on Victory Integrity 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 Victory Integrity with a short position of Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Integrity and Merck.
Diversification Opportunities for Victory Integrity and Merck
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Victory and Merck is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Victory Integrity Smallmid Cap and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company and Victory Integrity 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 Victory Integrity Smallmid Cap 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 Victory Integrity i.e., Victory Integrity and Merck go up and down completely randomly.
Pair Corralation between Victory Integrity and Merck
Assuming the 90 days horizon Victory Integrity Smallmid Cap is expected to under-perform the Merck. But the mutual fund apears to be less risky and, when comparing its historical volatility, Victory Integrity Smallmid Cap is 1.66 times less risky than Merck. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Merck Company is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9,858 in Merck Company on September 13, 2024 and sell it today you would earn a total of 203.00 from holding Merck Company or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Victory Integrity Smallmid Cap vs. Merck Company
Performance |
| Timeline |
| Victory Integrity |
| Merck Company |
Victory Integrity and Merck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Integrity and Merck
The main advantage of trading using opposite Victory Integrity and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Integrity 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.| Victory Integrity vs. Ashmore Emerging Markets | Victory Integrity vs. Origin Emerging Markets | Victory Integrity vs. Siit Emerging Markets | Victory Integrity vs. Pnc Emerging Markets |
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.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |