Correlation Between Merck and EPSILON HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both Merck and EPSILON HEALTHCARE 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 EPSILON HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and EPSILON HEALTHCARE LTD, you can compare the effects of market volatilities on Merck and EPSILON HEALTHCARE 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 EPSILON HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and EPSILON HEALTHCARE.
Diversification Opportunities for Merck and EPSILON HEALTHCARE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and EPSILON is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and EPSILON HEALTHCARE LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPSILON HEALTHCARE LTD 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 EPSILON HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPSILON HEALTHCARE LTD has no effect on the direction of Merck i.e., Merck and EPSILON HEALTHCARE go up and down completely randomly.
Pair Corralation between Merck and EPSILON HEALTHCARE
If you would invest 0.75 in EPSILON HEALTHCARE LTD on September 13, 2024 and sell it today you would earn a total of 0.00 from holding EPSILON HEALTHCARE LTD or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Merck Company vs. EPSILON HEALTHCARE LTD
Performance |
| Timeline |
| Merck Company |
| EPSILON HEALTHCARE LTD |
Merck and EPSILON HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and EPSILON HEALTHCARE
The main advantage of trading using opposite Merck and EPSILON HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, EPSILON HEALTHCARE 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 EPSILON HEALTHCARE will offset losses from the drop in EPSILON HEALTHCARE's long position.| Merck vs. Elanco Animal Health | Merck vs. Superior Plus Corp | Merck vs. NMI Holdings | Merck vs. SIVERS SEMICONDUCTORS AB |
| EPSILON HEALTHCARE vs. Merck Company | EPSILON HEALTHCARE vs. Elanco Animal Health | EPSILON HEALTHCARE vs. Superior Plus Corp | EPSILON HEALTHCARE vs. NMI Holdings |
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.
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