Correlation Between Merck and Cetus Capital
Can any of the company-specific risk be diversified away by investing in both Merck and Cetus 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 Cetus 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 Cetus Capital Acquisition, you can compare the effects of market volatilities on Merck and Cetus 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 Cetus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Cetus Capital.
Diversification Opportunities for Merck and Cetus Capital
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Merck and Cetus is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Cetus Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cetus Capital Acquisition 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 Cetus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cetus Capital Acquisition has no effect on the direction of Merck i.e., Merck and Cetus Capital go up and down completely randomly.
Pair Corralation between Merck and Cetus Capital
If you would invest 1,141 in Cetus Capital Acquisition on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Cetus Capital Acquisition or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Merck Company vs. Cetus Capital Acquisition
Performance |
| Timeline |
| Merck Company |
| Cetus Capital Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Cetus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Cetus Capital
The main advantage of trading using opposite Merck and Cetus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Cetus 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 Cetus Capital will offset losses from the drop in Cetus Capital's long position.The idea behind Merck Company and Cetus Capital Acquisition 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.| Cetus Capital vs. Pintec Technology Holdings | Cetus Capital vs. Chiba Bank Ltd | Cetus Capital vs. KeyCorp | Cetus Capital vs. Commonwealth Bank of |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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