Correlation Between Merck and Glen Eagle
Can any of the company-specific risk be diversified away by investing in both Merck and Glen Eagle 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 Glen Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Glen Eagle Resources, you can compare the effects of market volatilities on Merck and Glen Eagle 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 Glen Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Glen Eagle.
Diversification Opportunities for Merck and Glen Eagle
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Glen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Glen Eagle Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glen Eagle Resources 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 Glen Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glen Eagle Resources has no effect on the direction of Merck i.e., Merck and Glen Eagle go up and down completely randomly.
Pair Corralation between Merck and Glen Eagle
Considering the 90-day investment horizon Merck Company is expected to generate 0.72 times more return on investment than Glen Eagle. However, Merck Company is 1.4 times less risky than Glen Eagle. It trades about -0.08 of its potential returns per unit of risk. Glen Eagle Resources is currently generating about -0.08 per unit of risk. If you would invest 12,497 in Merck Company on September 3, 2024 and sell it today you would lose (2,333) from holding Merck Company or give up 18.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Merck Company vs. Glen Eagle Resources
Performance |
| Timeline |
| Merck Company |
| Glen Eagle Resources |
Merck and Glen Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Glen Eagle
The main advantage of trading using opposite Merck and Glen Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Glen Eagle 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 Glen Eagle will offset losses from the drop in Glen Eagle's long position.| Merck vs. Pfizer Inc | Merck vs. Johnson Johnson | Merck vs. Highway Holdings Limited | Merck vs. QCR Holdings |
| Glen Eagle vs. Qubec Nickel Corp | Glen Eagle vs. IGO Limited | Glen Eagle vs. Avarone Metals | Glen Eagle vs. Adriatic Metals PLC |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |