Correlation Between Merck and Churchill Capital
Can any of the company-specific risk be diversified away by investing in both Merck and Churchill Capital 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 Churchill Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Churchill Capital VI, you can compare the effects of market volatilities on Merck and Churchill Capital 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 Churchill Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Churchill Capital.
Diversification Opportunities for Merck and Churchill Capital
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Churchill is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Churchill Capital VI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Churchill Capital 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 Churchill Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Churchill Capital has no effect on the direction of Merck i.e., Merck and Churchill Capital go up and down completely randomly.
Pair Corralation between Merck and Churchill Capital
If you would invest 1,038 in Churchill Capital VI on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Churchill Capital VI or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Merck Company vs. Churchill Capital VI
Performance |
| Timeline |
| Merck Company |
| Churchill Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Churchill Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Churchill Capital
The main advantage of trading using opposite Merck and Churchill Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Churchill Capital 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 Churchill Capital will offset losses from the drop in Churchill Capital's long position.| Merck vs. Emergent Biosolutions | Merck vs. Bausch Health Companies | Merck vs. Neurocrine Biosciences | Merck vs. Teva Pharma Industries |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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