Correlation Between Merck and Accretion Acquisition
Can any of the company-specific risk be diversified away by investing in both Merck and Accretion Acquisition 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 Accretion Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Accretion Acquisition Corp, you can compare the effects of market volatilities on Merck and Accretion Acquisition 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 Accretion Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Accretion Acquisition.
Diversification Opportunities for Merck and Accretion Acquisition
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Accretion is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Accretion Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accretion Acquisition 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 Accretion Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accretion Acquisition has no effect on the direction of Merck i.e., Merck and Accretion Acquisition go up and down completely randomly.
Pair Corralation between Merck and Accretion Acquisition
Considering the 90-day investment horizon Merck is expected to generate 3.33 times less return on investment than Accretion Acquisition. In addition to that, Merck is 9.32 times more volatile than Accretion Acquisition Corp. It trades about 0.01 of its total potential returns per unit of risk. Accretion Acquisition Corp is currently generating about 0.19 per unit of volatility. If you would invest 1,001 in Accretion Acquisition Corp on August 30, 2024 and sell it today you would earn a total of 41.00 from holding Accretion Acquisition Corp or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 31.31% |
| Values | Daily Returns |
Merck Company vs. Accretion Acquisition Corp
Performance |
| Timeline |
| Merck Company |
| Accretion Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Accretion Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Accretion Acquisition
The main advantage of trading using opposite Merck and Accretion Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Accretion Acquisition 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 Accretion Acquisition will offset losses from the drop in Accretion Acquisition's long position.| Merck vs. Pharvaris BV | Merck vs. Brinker International | Merck vs. Alcoa Corp | Merck vs. Direxion Daily FTSE |
| Accretion Acquisition vs. Welsbach Technology Metals | Accretion Acquisition vs. Broad Capital Acquisition | Accretion Acquisition vs. Alpha One | Accretion Acquisition vs. Manaris Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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