Correlation Between Merck and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Merck and Angel Oak 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 Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Angel Oak Funds, you can compare the effects of market volatilities on Merck and Angel Oak 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 Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Angel Oak.
Diversification Opportunities for Merck and Angel Oak
Almost no diversification
The 3 months correlation between Merck and Angel is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Angel Oak Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Funds 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 Angel Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel Oak Funds has no effect on the direction of Merck i.e., Merck and Angel Oak go up and down completely randomly.
Pair Corralation between Merck and Angel Oak
Considering the 90-day investment horizon Merck Company is expected to under-perform the Angel Oak. In addition to that, Merck is 5.02 times more volatile than Angel Oak Funds. It trades about -0.12 of its total potential returns per unit of risk. Angel Oak Funds is currently generating about 0.12 per unit of volatility. If you would invest 825.00 in Angel Oak Funds on September 3, 2024 and sell it today you would earn a total of 37.00 from holding Angel Oak Funds or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merck Company vs. Angel Oak Funds
Performance |
| Timeline |
| Merck Company |
| Angel Oak Funds |
Merck and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Angel Oak
The main advantage of trading using opposite Merck and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Angel Oak 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 Angel Oak will offset losses from the drop in Angel Oak's long position.| Merck vs. Pfizer Inc | Merck vs. Johnson Johnson | Merck vs. Highway Holdings Limited | Merck vs. QCR Holdings |
| Angel Oak vs. Valued Advisers Trust | Angel Oak vs. Columbia Diversified Fixed | Angel Oak vs. Principal Exchange Traded Funds | Angel Oak vs. Doubleline Etf 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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