Correlation Between Merck and Lexeo Therapeutics,
Can any of the company-specific risk be diversified away by investing in both Merck and Lexeo Therapeutics, 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 Lexeo Therapeutics, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Lexeo Therapeutics, Common, you can compare the effects of market volatilities on Merck and Lexeo Therapeutics, 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 Lexeo Therapeutics,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Lexeo Therapeutics,.
Diversification Opportunities for Merck and Lexeo Therapeutics,
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Merck and Lexeo is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Lexeo Therapeutics, Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexeo Therapeutics, 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 Lexeo Therapeutics,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexeo Therapeutics, has no effect on the direction of Merck i.e., Merck and Lexeo Therapeutics, go up and down completely randomly.
Pair Corralation between Merck and Lexeo Therapeutics,
Considering the 90-day investment horizon Merck Company is expected to generate 0.44 times more return on investment than Lexeo Therapeutics,. However, Merck Company is 2.3 times less risky than Lexeo Therapeutics,. It trades about -0.25 of its potential returns per unit of risk. Lexeo Therapeutics, Common is currently generating about -0.18 per unit of risk. If you would invest 9,985 in Merck Company on November 9, 2024 and sell it today you would lose (1,180) from holding Merck Company or give up 11.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merck Company vs. Lexeo Therapeutics, Common
Performance |
| Timeline |
| Merck Company |
| Lexeo Therapeutics, |
Merck and Lexeo Therapeutics, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Lexeo Therapeutics,
The main advantage of trading using opposite Merck and Lexeo Therapeutics, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Lexeo Therapeutics, 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 Lexeo Therapeutics, will offset losses from the drop in Lexeo Therapeutics,'s long position.The idea behind Merck Company and Lexeo Therapeutics, Common pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lexeo Therapeutics, vs. Constellation Brands Class | Lexeo Therapeutics, vs. Naked Wines plc | Lexeo Therapeutics, vs. Sea | Lexeo Therapeutics, vs. Weibo Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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