Correlation Between Merck and Aog Institutional
Can any of the company-specific risk be diversified away by investing in both Merck and Aog Institutional 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 Aog Institutional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Aog Institutional, you can compare the effects of market volatilities on Merck and Aog Institutional 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 Aog Institutional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Aog Institutional.
Diversification Opportunities for Merck and Aog Institutional
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Aog is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Aog Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aog Institutional 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 Aog Institutional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aog Institutional has no effect on the direction of Merck i.e., Merck and Aog Institutional go up and down completely randomly.
Pair Corralation between Merck and Aog Institutional
Considering the 90-day investment horizon Merck is expected to generate 38.7 times less return on investment than Aog Institutional. In addition to that, Merck is 8.71 times more volatile than Aog Institutional. It trades about 0.0 of its total potential returns per unit of risk. Aog Institutional is currently generating about 0.27 per unit of volatility. If you would invest 1,475 in Aog Institutional on September 3, 2024 and sell it today you would earn a total of 193.00 from holding Aog Institutional or generate 13.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 64.44% |
| Values | Daily Returns |
Merck Company vs. Aog Institutional
Performance |
| Timeline |
| Merck Company |
| Aog Institutional |
Merck and Aog Institutional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Aog Institutional
The main advantage of trading using opposite Merck and Aog Institutional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Aog Institutional 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 Aog Institutional will offset losses from the drop in Aog Institutional's long position.| Merck vs. Pfizer Inc | Merck vs. Johnson Johnson | Merck vs. Highway Holdings Limited | Merck vs. QCR Holdings |
| Aog Institutional vs. Qs Growth Fund | Aog Institutional vs. Nationwide Growth Fund | Aog Institutional vs. Goldman Sachs Growth | Aog Institutional vs. Small Pany Growth |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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