Correlation Between Merck and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Merck and Eaton Vance 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 Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Eaton Vance Special, you can compare the effects of market volatilities on Merck and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Eaton Vance.
Diversification Opportunities for Merck and Eaton Vance
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merck and Eaton is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Eaton Vance Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Special 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Special has no effect on the direction of Merck i.e., Merck and Eaton Vance go up and down completely randomly.
Pair Corralation between Merck and Eaton Vance
If you would invest 10,402 in Merck Company on August 30, 2024 and sell it today you would lose (90.00) from holding Merck Company or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.32% |
| Values | Daily Returns |
Merck Company vs. Eaton Vance Special
Performance |
| Timeline |
| Merck Company |
| Eaton Vance Special |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Eaton Vance
The main advantage of trading using opposite Merck and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.| Merck vs. Pharvaris BV | Merck vs. Brinker International | Merck vs. Alcoa Corp | Merck vs. Direxion Daily FTSE |
| Eaton Vance vs. Calamos Global Equity | Eaton Vance vs. Artisan Select Equity | Eaton Vance vs. Rbc Ultra Short Fixed | Eaton Vance vs. Doubleline E Fixed |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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