Correlation Between Merck and Heska
Can any of the company-specific risk be diversified away by investing in both Merck and Heska 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 Heska into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Heska, you can compare the effects of market volatilities on Merck and Heska 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 Heska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Heska.
Diversification Opportunities for Merck and Heska
Excellent diversification
The 3 months correlation between Merck and Heska is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Heska in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heska 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 Heska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heska has no effect on the direction of Merck i.e., Merck and Heska go up and down completely randomly.
Pair Corralation between Merck and Heska
If you would invest 11,999 in Heska on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Heska or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 1.59% |
| Values | Daily Returns |
Merck Company vs. Heska
Performance |
| Timeline |
| Merck Company |
| Heska |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Heska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Heska
The main advantage of trading using opposite Merck and Heska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Heska 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 Heska will offset losses from the drop in Heska's long position.| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |