Correlation Between Merck and Forbion European
Can any of the company-specific risk be diversified away by investing in both Merck and Forbion European 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 Forbion European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Forbion European Acquisition, you can compare the effects of market volatilities on Merck and Forbion European 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 Forbion European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Forbion European.
Diversification Opportunities for Merck and Forbion European
-0.96 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Forbion is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Forbion European Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forbion European Acq 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 Forbion European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forbion European Acq has no effect on the direction of Merck i.e., Merck and Forbion European go up and down completely randomly.
Pair Corralation between Merck and Forbion European
If you would invest 1,077 in Forbion European Acquisition on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Forbion European Acquisition or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.8% |
| Values | Daily Returns |
Merck Company vs. Forbion European Acquisition
Performance |
| Timeline |
| Merck Company |
| Forbion European Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Forbion European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Forbion European
The main advantage of trading using opposite Merck and Forbion European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Forbion European 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 Forbion European will offset losses from the drop in Forbion European's long position.| Merck vs. Pfizer Inc | Merck vs. Johnson Johnson | Merck vs. Highway Holdings Limited | Merck vs. QCR Holdings |
| Forbion European vs. Bellevue Life Sciences | Forbion European vs. Four Leaf Acquisition | Forbion European vs. Swiftmerge Acquisition Corp | Forbion European 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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