Correlation Between Merck and CONX Corp
Can any of the company-specific risk be diversified away by investing in both Merck and CONX Corp 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 CONX Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and CONX Corp, you can compare the effects of market volatilities on Merck and CONX Corp 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 CONX Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and CONX Corp.
Diversification Opportunities for Merck and CONX Corp
Pay attention - limited upside
The 3 months correlation between Merck and CONX is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and CONX Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONX Corp 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 CONX Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONX Corp has no effect on the direction of Merck i.e., Merck and CONX Corp go up and down completely randomly.
Pair Corralation between Merck and CONX Corp
If you would invest 1,043 in CONX Corp on September 3, 2024 and sell it today you would earn a total of 0.00 from holding CONX Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.8% |
| Values | Daily Returns |
Merck Company vs. CONX Corp
Performance |
| Timeline |
| Merck Company |
| CONX Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and CONX Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and CONX Corp
The main advantage of trading using opposite Merck and CONX Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, CONX Corp 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 CONX Corp will offset losses from the drop in CONX Corp's long position.| Merck vs. Pfizer Inc | Merck vs. Johnson Johnson | Merck vs. Highway Holdings Limited | Merck vs. QCR Holdings |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Positions Ratings 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 |