Correlation Between Merck and Oberbank
Can any of the company-specific risk be diversified away by investing in both Merck and Oberbank 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 Oberbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Oberbank AG, you can compare the effects of market volatilities on Merck and Oberbank 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 Oberbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Oberbank.
Diversification Opportunities for Merck and Oberbank
Very good diversification
The 3 months correlation between Merck and Oberbank is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Oberbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberbank AG 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 Oberbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberbank AG has no effect on the direction of Merck i.e., Merck and Oberbank go up and down completely randomly.
Pair Corralation between Merck and Oberbank
Assuming the 90 days trading horizon Merck Company is expected to under-perform the Oberbank. In addition to that, Merck is 24.84 times more volatile than Oberbank AG. It trades about -0.05 of its total potential returns per unit of risk. Oberbank AG is currently generating about 0.21 per unit of volatility. If you would invest 6,980 in Oberbank AG on November 3, 2024 and sell it today you would earn a total of 20.00 from holding Oberbank AG or generate 0.29% 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. Oberbank AG
Performance |
| Timeline |
| Merck Company |
| Oberbank AG |
Merck and Oberbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Oberbank
The main advantage of trading using opposite Merck and Oberbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Oberbank 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 Oberbank will offset losses from the drop in Oberbank's long position.| Merck vs. UNIQA Insurance Group | Merck vs. Oberbank AG | Merck vs. Raiffeisen Bank International | Merck vs. Vienna Insurance Group |
| Oberbank vs. RATH Aktiengesellschaft | Oberbank vs. AT S Austria | Oberbank vs. BAWAG Group AG | Oberbank vs. Semperit Aktiengesellschaft Holding |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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