Correlation Between Merck and Barclays Capital
Can any of the company-specific risk be diversified away by investing in both Merck and Barclays Capital 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 Barclays Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Barclays Capital, you can compare the effects of market volatilities on Merck and Barclays Capital 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 Barclays Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Barclays Capital.
Diversification Opportunities for Merck and Barclays Capital
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merck and Barclays is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital 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 Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of Merck i.e., Merck and Barclays Capital go up and down completely randomly.
Pair Corralation between Merck and Barclays Capital
If you would invest 6,604 in Barclays Capital on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Barclays Capital or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.3% |
| Values | Daily Returns |
Merck Company vs. Barclays Capital
Performance |
| Timeline |
| Merck Company |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Barclays Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Barclays Capital
The main advantage of trading using opposite Merck and Barclays Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Barclays Capital 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 Barclays Capital will offset losses from the drop in Barclays Capital's long position.| Merck vs. Victory Integrity Smallmid Cap | Merck vs. Hilton Worldwide Holdings | Merck vs. NVIDIA | Merck vs. JPMorgan Chase Co |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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