Correlation Between Merck and Spinnaker ETF
Can any of the company-specific risk be diversified away by investing in both Merck and Spinnaker ETF 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 Spinnaker ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Spinnaker ETF Series, you can compare the effects of market volatilities on Merck and Spinnaker ETF 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 Spinnaker ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Spinnaker ETF.
Diversification Opportunities for Merck and Spinnaker ETF
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Spinnaker is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Spinnaker ETF Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spinnaker ETF Series 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 Spinnaker ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spinnaker ETF Series has no effect on the direction of Merck i.e., Merck and Spinnaker ETF go up and down completely randomly.
Pair Corralation between Merck and Spinnaker ETF
Considering the 90-day investment horizon Merck Company is expected to under-perform the Spinnaker ETF. But the stock apears to be less risky and, when comparing its historical volatility, Merck Company is 63.94 times less risky than Spinnaker ETF. The stock trades about -0.02 of its potential returns per unit of risk. The Spinnaker ETF Series is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Spinnaker ETF Series on August 26, 2024 and sell it today you would earn a total of 1,016 from holding Spinnaker ETF Series or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 40.86% |
| Values | Daily Returns |
Merck Company vs. Spinnaker ETF Series
Performance |
| Timeline |
| Merck Company |
| Spinnaker ETF Series |
Merck and Spinnaker ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Spinnaker ETF
The main advantage of trading using opposite Merck and Spinnaker ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Spinnaker ETF 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 Spinnaker ETF will offset losses from the drop in Spinnaker ETF's long position.| Merck vs. Capricor Therapeutics | Merck vs. Akari Therapeutics PLC | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings |
| Spinnaker ETF vs. Capital Group Short | Spinnaker ETF vs. Capital Group Municipal | Spinnaker ETF vs. Capital Group Global | Spinnaker ETF vs. Capital Group Dividend |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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