Correlation Between Merck and Jackpot Digital
Can any of the company-specific risk be diversified away by investing in both Merck and Jackpot Digital 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 Jackpot Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Jackpot Digital, you can compare the effects of market volatilities on Merck and Jackpot Digital 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 Jackpot Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Jackpot Digital.
Diversification Opportunities for Merck and Jackpot Digital
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Merck and Jackpot is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Jackpot Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackpot Digital 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 Jackpot Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jackpot Digital has no effect on the direction of Merck i.e., Merck and Jackpot Digital go up and down completely randomly.
Pair Corralation between Merck and Jackpot Digital
Considering the 90-day investment horizon Merck Company is expected to generate 0.36 times more return on investment than Jackpot Digital. However, Merck Company is 2.81 times less risky than Jackpot Digital. It trades about -0.08 of its potential returns per unit of risk. Jackpot Digital is currently generating about -0.08 per unit of risk. If you would invest 10,423 in Merck Company on August 29, 2024 and sell it today you would lose (261.00) from holding Merck Company or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merck Company vs. Jackpot Digital
Performance |
| Timeline |
| Merck Company |
| Jackpot Digital |
Merck and Jackpot Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Jackpot Digital
The main advantage of trading using opposite Merck and Jackpot Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Jackpot Digital 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 Jackpot Digital will offset losses from the drop in Jackpot Digital's long position.| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
| Jackpot Digital vs. FitLife Brands, Common | Jackpot Digital vs. HUMANA INC | Jackpot Digital vs. SCOR PK | Jackpot Digital vs. Aquagold International |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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