Correlation Between Merck and IShares IBonds
Can any of the company-specific risk be diversified away by investing in both Merck and IShares IBonds 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 IShares IBonds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and iShares iBonds 2026, you can compare the effects of market volatilities on Merck and IShares IBonds 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 IShares IBonds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and IShares IBonds.
Diversification Opportunities for Merck and IShares IBonds
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and IShares is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and iShares iBonds 2026 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares iBonds 2026 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 IShares IBonds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares iBonds 2026 has no effect on the direction of Merck i.e., Merck and IShares IBonds go up and down completely randomly.
Pair Corralation between Merck and IShares IBonds
Considering the 90-day investment horizon Merck Company is expected to under-perform the IShares IBonds. In addition to that, Merck is 9.2 times more volatile than iShares iBonds 2026. It trades about -0.17 of its total potential returns per unit of risk. iShares iBonds 2026 is currently generating about 0.11 per unit of volatility. If you would invest 2,314 in iShares iBonds 2026 on August 30, 2024 and sell it today you would earn a total of 15.00 from holding iShares iBonds 2026 or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merck Company vs. iShares iBonds 2026
Performance |
| Timeline |
| Merck Company |
| iShares iBonds 2026 |
Merck and IShares IBonds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and IShares IBonds
The main advantage of trading using opposite Merck and IShares IBonds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, IShares IBonds 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 IShares IBonds will offset losses from the drop in IShares IBonds' long position.| Merck vs. Emergent Biosolutions | Merck vs. Bausch Health Companies | Merck vs. Neurocrine Biosciences | Merck vs. Teva Pharma Industries |
| IShares IBonds vs. iShares iBonds 2025 | IShares IBonds vs. iShares iBonds 2024 | IShares IBonds vs. iShares iBonds 2027 | IShares IBonds vs. iShares Trust |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |