Correlation Between Merck and Aziyo Biologics
Can any of the company-specific risk be diversified away by investing in both Merck and Aziyo Biologics 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 Aziyo Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Aziyo Biologics, you can compare the effects of market volatilities on Merck and Aziyo Biologics 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 Aziyo Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Aziyo Biologics.
Diversification Opportunities for Merck and Aziyo Biologics
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merck and Aziyo is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Aziyo Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aziyo Biologics 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 Aziyo Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aziyo Biologics has no effect on the direction of Merck i.e., Merck and Aziyo Biologics go up and down completely randomly.
Pair Corralation between Merck and Aziyo Biologics
If you would invest 10,003 in Merck Company on August 24, 2024 and sell it today you would lose (85.00) from holding Merck Company or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.37% |
| Values | Daily Returns |
Merck Company vs. Aziyo Biologics
Performance |
| Timeline |
| Merck Company |
| Aziyo Biologics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Aziyo Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Aziyo Biologics
The main advantage of trading using opposite Merck and Aziyo Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Aziyo Biologics 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 Aziyo Biologics will offset losses from the drop in Aziyo Biologics' long position.The idea behind Merck Company and Aziyo Biologics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Aziyo Biologics vs. Ainos Inc | Aziyo Biologics vs. SurModics | Aziyo Biologics vs. LENSAR Inc | Aziyo Biologics vs. IRIDEX |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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