Correlation Between Merck and Eiffage SA
Can any of the company-specific risk be diversified away by investing in both Merck and Eiffage SA 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 Eiffage SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Eiffage SA, you can compare the effects of market volatilities on Merck and Eiffage SA 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 Eiffage SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Eiffage SA.
Diversification Opportunities for Merck and Eiffage SA
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merck and Eiffage is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Eiffage SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiffage SA 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 Eiffage SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eiffage SA has no effect on the direction of Merck i.e., Merck and Eiffage SA go up and down completely randomly.
Pair Corralation between Merck and Eiffage SA
If you would invest 10,483 in Eiffage SA on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Eiffage SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Merck Company vs. Eiffage SA
Performance |
| Timeline |
| Merck Company |
| Eiffage SA |
Merck and Eiffage SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Eiffage SA
The main advantage of trading using opposite Merck and Eiffage SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Eiffage SA 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 Eiffage SA will offset losses from the drop in Eiffage SA's long position.| Merck vs. Pfizer Inc | Merck vs. Johnson Johnson | Merck vs. Highway Holdings Limited | Merck vs. QCR Holdings |
| Eiffage SA vs. Travis Perkins PLC | Eiffage SA vs. Antelope Enterprise Holdings | Eiffage SA vs. Intelligent Living Application | Eiffage SA vs. Beacon Roofing Supply |
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 Positions Ratings module to 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.
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