Correlation Between Merck and APT Satellite
Can any of the company-specific risk be diversified away by investing in both Merck and APT Satellite 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 APT Satellite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and APT Satellite Holdings, you can compare the effects of market volatilities on Merck and APT Satellite 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 APT Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and APT Satellite.
Diversification Opportunities for Merck and APT Satellite
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merck and APT is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and APT Satellite Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APT Satellite Holdings 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 APT Satellite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APT Satellite Holdings has no effect on the direction of Merck i.e., Merck and APT Satellite go up and down completely randomly.
Pair Corralation between Merck and APT Satellite
If you would invest 28.00 in APT Satellite Holdings on August 29, 2024 and sell it today you would earn a total of 0.00 from holding APT Satellite Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Merck Company vs. APT Satellite Holdings
Performance |
| Timeline |
| Merck Company |
| APT Satellite Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and APT Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and APT Satellite
The main advantage of trading using opposite Merck and APT Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, APT Satellite 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 APT Satellite will offset losses from the drop in APT Satellite's long position.| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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