Correlation Between Merck and GraniteShares 15x
Can any of the company-specific risk be diversified away by investing in both Merck and GraniteShares 15x 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 GraniteShares 15x into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and GraniteShares 15x Long, you can compare the effects of market volatilities on Merck and GraniteShares 15x 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 GraniteShares 15x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and GraniteShares 15x.
Diversification Opportunities for Merck and GraniteShares 15x
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merck and GraniteShares is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and GraniteShares 15x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 15x Long 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 GraniteShares 15x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 15x Long has no effect on the direction of Merck i.e., Merck and GraniteShares 15x go up and down completely randomly.
Pair Corralation between Merck and GraniteShares 15x
Considering the 90-day investment horizon Merck Company is expected to under-perform the GraniteShares 15x. But the stock apears to be less risky and, when comparing its historical volatility, Merck Company is 2.61 times less risky than GraniteShares 15x. The stock trades about -0.28 of its potential returns per unit of risk. The GraniteShares 15x Long is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 3,172 in GraniteShares 15x Long on August 25, 2024 and sell it today you would lose (124.00) from holding GraniteShares 15x Long or give up 3.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merck Company vs. GraniteShares 15x Long
Performance |
| Timeline |
| Merck Company |
| GraniteShares 15x Long |
Merck and GraniteShares 15x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and GraniteShares 15x
The main advantage of trading using opposite Merck and GraniteShares 15x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, GraniteShares 15x 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 GraniteShares 15x will offset losses from the drop in GraniteShares 15x's long position.| Merck vs. Capricor Therapeutics | Merck vs. Akari Therapeutics PLC | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings |
| GraniteShares 15x vs. Direxion Daily SP | GraniteShares 15x vs. Direxion Daily Semiconductor | GraniteShares 15x vs. Direxion Daily Semiconductor |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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