Correlation Between Merck and Nexalin Technology
Can any of the company-specific risk be diversified away by investing in both Merck and Nexalin Technology 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 Nexalin Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Nexalin Technology, you can compare the effects of market volatilities on Merck and Nexalin Technology 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 Nexalin Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Nexalin Technology.
Diversification Opportunities for Merck and Nexalin Technology
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Nexalin is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Nexalin Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexalin Technology 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 Nexalin Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexalin Technology has no effect on the direction of Merck i.e., Merck and Nexalin Technology go up and down completely randomly.
Pair Corralation between Merck and Nexalin Technology
Considering the 90-day investment horizon Merck Company is expected to under-perform the Nexalin Technology. But the stock apears to be less risky and, when comparing its historical volatility, Merck Company is 11.03 times less risky than Nexalin Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Nexalin Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 93.00 in Nexalin Technology on August 28, 2024 and sell it today you would earn a total of 297.00 from holding Nexalin Technology or generate 319.35% 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. Nexalin Technology
Performance |
| Timeline |
| Merck Company |
| Nexalin Technology |
Merck and Nexalin Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Nexalin Technology
The main advantage of trading using opposite Merck and Nexalin Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Nexalin Technology 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 Nexalin Technology will offset losses from the drop in Nexalin Technology's long position.| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
| Nexalin Technology vs. Electromed | Nexalin Technology vs. Armm Inc | Nexalin Technology vs. SurModics | Nexalin Technology vs. Bluejay Diagnostics |
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.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |