Correlation Between Merck and Ebix
Can any of the company-specific risk be diversified away by investing in both Merck and Ebix 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 Ebix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Ebix Inc, you can compare the effects of market volatilities on Merck and Ebix 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 Ebix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Ebix.
Diversification Opportunities for Merck and Ebix
Pay attention - limited upside
The 3 months correlation between Merck and Ebix is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Ebix Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebix Inc 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 Ebix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebix Inc has no effect on the direction of Merck i.e., Merck and Ebix go up and down completely randomly.
Pair Corralation between Merck and Ebix
If you would invest 10,167 in Merck Company on September 4, 2024 and sell it today you would lose (106.00) from holding Merck Company or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.41% |
| Values | Daily Returns |
Merck Company vs. Ebix Inc
Performance |
| Timeline |
| Merck Company |
| Ebix Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Ebix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Ebix
The main advantage of trading using opposite Merck and Ebix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Ebix 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 Ebix will offset losses from the drop in Ebix's long position.| Merck vs. Crinetics Pharmaceuticals | Merck vs. Enanta Pharmaceuticals | Merck vs. Amicus Therapeutics | Merck vs. Connect Biopharma 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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