Correlation Between Merck and EMQQ Emerging
Can any of the company-specific risk be diversified away by investing in both Merck and EMQQ Emerging 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 EMQQ Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and EMQQ The Emerging, you can compare the effects of market volatilities on Merck and EMQQ Emerging 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 EMQQ Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and EMQQ Emerging.
Diversification Opportunities for Merck and EMQQ Emerging
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merck and EMQQ is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and EMQQ The Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMQQ The Emerging 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 EMQQ Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMQQ The Emerging has no effect on the direction of Merck i.e., Merck and EMQQ Emerging go up and down completely randomly.
Pair Corralation between Merck and EMQQ Emerging
Considering the 90-day investment horizon Merck Company is expected to under-perform the EMQQ Emerging. But the stock apears to be less risky and, when comparing its historical volatility, Merck Company is 1.28 times less risky than EMQQ Emerging. The stock trades about 0.0 of its potential returns per unit of risk. The EMQQ The Emerging is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,987 in EMQQ The Emerging on August 26, 2024 and sell it today you would earn a total of 709.00 from holding EMQQ The Emerging or generate 23.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merck Company vs. EMQQ The Emerging
Performance |
| Timeline |
| Merck Company |
| EMQQ The Emerging |
Merck and EMQQ Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and EMQQ Emerging
The main advantage of trading using opposite Merck and EMQQ Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, EMQQ Emerging 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 EMQQ Emerging will offset losses from the drop in EMQQ Emerging's long position.| Merck vs. Capricor Therapeutics | Merck vs. Akari Therapeutics PLC | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings |
| EMQQ Emerging vs. Invesco China Technology | EMQQ Emerging vs. Amplify Online Retail | EMQQ Emerging vs. KraneShares CSI China | EMQQ Emerging vs. Global X MSCI |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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