Correlation Between Merck and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Merck and Cohen Steers 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 Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Cohen Steers Closed, you can compare the effects of market volatilities on Merck and Cohen Steers 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 Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Cohen Steers.
Diversification Opportunities for Merck and Cohen Steers
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merck and Cohen is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Cohen Steers Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Closed 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 Cohen Steers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Steers Closed has no effect on the direction of Merck i.e., Merck and Cohen Steers go up and down completely randomly.
Pair Corralation between Merck and Cohen Steers
Considering the 90-day investment horizon Merck Company is expected to under-perform the Cohen Steers. In addition to that, Merck is 1.55 times more volatile than Cohen Steers Closed. It trades about -0.01 of its total potential returns per unit of risk. Cohen Steers Closed is currently generating about 0.19 per unit of volatility. If you would invest 1,270 in Cohen Steers Closed on August 30, 2024 and sell it today you would earn a total of 47.00 from holding Cohen Steers Closed or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merck Company vs. Cohen Steers Closed
Performance |
| Timeline |
| Merck Company |
| Cohen Steers Closed |
Merck and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Cohen Steers
The main advantage of trading using opposite Merck and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Cohen Steers 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 Cohen Steers will offset losses from the drop in Cohen Steers' long position.| Merck vs. Emergent Biosolutions | Merck vs. Bausch Health Companies | Merck vs. Neurocrine Biosciences | Merck vs. Teva Pharma Industries |
| Cohen Steers vs. Cohen And Steers | Cohen Steers vs. Cohen Steers Total | Cohen Steers vs. Reaves Utility If | Cohen Steers vs. BlackRock Science Tech |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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