Correlation Between Merck and WillScot Mobile
Can any of the company-specific risk be diversified away by investing in both Merck and WillScot Mobile 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 WillScot Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and WillScot Mobile Mini, you can compare the effects of market volatilities on Merck and WillScot Mobile 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 WillScot Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and WillScot Mobile.
Diversification Opportunities for Merck and WillScot Mobile
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Merck and WillScot is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and WillScot Mobile Mini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WillScot Mobile Mini 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 WillScot Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WillScot Mobile Mini has no effect on the direction of Merck i.e., Merck and WillScot Mobile go up and down completely randomly.
Pair Corralation between Merck and WillScot Mobile
Assuming the 90 days trading horizon Merck Company is expected to generate 0.65 times more return on investment than WillScot Mobile. However, Merck Company is 1.54 times less risky than WillScot Mobile. It trades about 0.02 of its potential returns per unit of risk. WillScot Mobile Mini is currently generating about -0.01 per unit of risk. If you would invest 13,751 in Merck Company on September 12, 2024 and sell it today you would earn a total of 644.00 from holding Merck Company or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merck Company vs. WillScot Mobile Mini
Performance |
| Timeline |
| Merck Company |
| WillScot Mobile Mini |
Merck and WillScot Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and WillScot Mobile
The main advantage of trading using opposite Merck and WillScot Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, WillScot Mobile 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 WillScot Mobile will offset losses from the drop in WillScot Mobile's long position.| Merck vs. PUBLIC STORAGE PRFO | Merck vs. Associated British Foods | Merck vs. SENECA FOODS A | Merck vs. Food Life Companies |
| WillScot Mobile vs. United Rentals | WillScot Mobile vs. Superior Plus Corp | WillScot Mobile vs. SIVERS SEMICONDUCTORS AB | WillScot Mobile vs. Norsk Hydro ASA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |