Correlation Between Merck and Beard Energy
Can any of the company-specific risk be diversified away by investing in both Merck and Beard Energy 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 Beard Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Beard Energy Transition, you can compare the effects of market volatilities on Merck and Beard Energy 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 Beard Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Beard Energy.
Diversification Opportunities for Merck and Beard Energy
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Beard is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Beard Energy Transition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beard Energy Transition 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 Beard Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beard Energy Transition has no effect on the direction of Merck i.e., Merck and Beard Energy go up and down completely randomly.
Pair Corralation between Merck and Beard Energy
If you would invest 9,858 in Merck Company on September 13, 2024 and sell it today you would earn a total of 203.00 from holding Merck Company or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Merck Company vs. Beard Energy Transition
Performance |
| Timeline |
| Merck Company |
| Beard Energy Transition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Beard Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Beard Energy
The main advantage of trading using opposite Merck and Beard Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Beard Energy 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 Beard Energy will offset losses from the drop in Beard Energy's long position.The idea behind Merck Company and Beard Energy Transition 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.| Beard Energy vs. Valuence Merger Corp | Beard Energy vs. PowerUp Acquisition Corp | Beard Energy vs. Everest Consolidator Acquisition | Beard Energy vs. Valuence Merger Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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