Correlation Between Merck and Grupo Concesionario
Can any of the company-specific risk be diversified away by investing in both Merck and Grupo Concesionario 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 and Grupo Concesionario into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Grupo Concesionario del, you can compare the effects of market volatilities on Merck and Grupo Concesionario 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 with a short position of Grupo Concesionario. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Grupo Concesionario.
Diversification Opportunities for Merck and Grupo Concesionario
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Merck and Grupo is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Grupo Concesionario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Concesionario del and Merck 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 Company are associated (or correlated) with Grupo Concesionario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Concesionario del has no effect on the direction of Merck i.e., Merck and Grupo Concesionario go up and down completely randomly.
Pair Corralation between Merck and Grupo Concesionario
Assuming the 90 days trading horizon Merck Company is expected to generate 0.84 times more return on investment than Grupo Concesionario. However, Merck Company is 1.18 times less risky than Grupo Concesionario. It trades about 0.19 of its potential returns per unit of risk. Grupo Concesionario del is currently generating about -0.11 per unit of risk. If you would invest 2,157,500 in Merck Company on December 6, 2024 and sell it today you would earn a total of 147,500 from holding Merck Company or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merck Company vs. Grupo Concesionario del
Performance |
| Timeline |
| Merck Company |
| Grupo Concesionario del |
Merck and Grupo Concesionario Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Grupo Concesionario
The main advantage of trading using opposite Merck and Grupo Concesionario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Grupo Concesionario 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 Grupo Concesionario will offset losses from the drop in Grupo Concesionario's long position.| Merck vs. Harmony Gold Mining | Merck vs. Verizon Communications | Merck vs. Agrometal SAI | Merck vs. Telecom Argentina |
| Grupo Concesionario vs. Verizon Communications | Grupo Concesionario vs. Transportadora de Gas | Grupo Concesionario vs. Agrometal SAI | Grupo Concesionario 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |