Correlation Between Merck and Valkyrie Bitcoin
Can any of the company-specific risk be diversified away by investing in both Merck and Valkyrie Bitcoin 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 Valkyrie Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Valkyrie Bitcoin, you can compare the effects of market volatilities on Merck and Valkyrie Bitcoin 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 Valkyrie Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Valkyrie Bitcoin.
Diversification Opportunities for Merck and Valkyrie Bitcoin
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Valkyrie is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Valkyrie Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valkyrie Bitcoin 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 Valkyrie Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valkyrie Bitcoin has no effect on the direction of Merck i.e., Merck and Valkyrie Bitcoin go up and down completely randomly.
Pair Corralation between Merck and Valkyrie Bitcoin
Considering the 90-day investment horizon Merck is expected to generate 76.29 times less return on investment than Valkyrie Bitcoin. But when comparing it to its historical volatility, Merck Company is 2.89 times less risky than Valkyrie Bitcoin. It trades about 0.0 of its potential returns per unit of risk. Valkyrie Bitcoin is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,329 in Valkyrie Bitcoin on August 29, 2024 and sell it today you would earn a total of 1,408 from holding Valkyrie Bitcoin or generate 105.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 71.47% |
| Values | Daily Returns |
Merck Company vs. Valkyrie Bitcoin
Performance |
| Timeline |
| Merck Company |
| Valkyrie Bitcoin |
Merck and Valkyrie Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Valkyrie Bitcoin
The main advantage of trading using opposite Merck and Valkyrie Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Valkyrie Bitcoin 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 Valkyrie Bitcoin will offset losses from the drop in Valkyrie Bitcoin's long position.| Merck vs. Pharvaris BV | Merck vs. Brinker International | Merck vs. Alcoa Corp | Merck vs. Direxion Daily FTSE |
| Valkyrie Bitcoin vs. ProShares Trust | Valkyrie Bitcoin vs. iShares Ethereum Trust | Valkyrie Bitcoin vs. ProShares Trust | Valkyrie Bitcoin vs. Grayscale Ethereum Trust |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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