Correlation Between Merck and ClearShares Ultra
Can any of the company-specific risk be diversified away by investing in both Merck and ClearShares Ultra 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 ClearShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and ClearShares Ultra Short Maturity, you can compare the effects of market volatilities on Merck and ClearShares Ultra 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 ClearShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and ClearShares Ultra.
Diversification Opportunities for Merck and ClearShares Ultra
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and ClearShares is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and ClearShares Ultra Short Maturi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearShares Ultra Short 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 ClearShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearShares Ultra Short has no effect on the direction of Merck i.e., Merck and ClearShares Ultra go up and down completely randomly.
Pair Corralation between Merck and ClearShares Ultra
Considering the 90-day investment horizon Merck is expected to generate 3.45 times less return on investment than ClearShares Ultra. In addition to that, Merck is 52.87 times more volatile than ClearShares Ultra Short Maturity. It trades about 0.0 of its total potential returns per unit of risk. ClearShares Ultra Short Maturity is currently generating about 0.83 per unit of volatility. If you would invest 9,538 in ClearShares Ultra Short Maturity on August 26, 2024 and sell it today you would earn a total of 505.00 from holding ClearShares Ultra Short Maturity or generate 5.29% 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. ClearShares Ultra Short Maturi
Performance |
| Timeline |
| Merck Company |
| ClearShares Ultra Short |
Merck and ClearShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and ClearShares Ultra
The main advantage of trading using opposite Merck and ClearShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, ClearShares Ultra 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 ClearShares Ultra will offset losses from the drop in ClearShares Ultra's long position.| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
| ClearShares Ultra vs. First Trust Low | ClearShares Ultra vs. First Trust Senior | ClearShares Ultra vs. First Trust TCW | ClearShares Ultra vs. First Trust Tactical |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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