Correlation Between Merck and Pcm Fund
Can any of the company-specific risk be diversified away by investing in both Merck and Pcm Fund 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 Pcm Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Pcm Fund, you can compare the effects of market volatilities on Merck and Pcm Fund 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 Pcm Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Pcm Fund.
Diversification Opportunities for Merck and Pcm Fund
Pay attention - limited upside
The 3 months correlation between Merck and Pcm is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Pcm Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pcm Fund 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 Pcm Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pcm Fund has no effect on the direction of Merck i.e., Merck and Pcm Fund go up and down completely randomly.
Pair Corralation between Merck and Pcm Fund
Considering the 90-day investment horizon Merck Company is expected to under-perform the Pcm Fund. In addition to that, Merck is 1.02 times more volatile than Pcm Fund. It trades about -0.01 of its total potential returns per unit of risk. Pcm Fund is currently generating about 0.04 per unit of volatility. If you would invest 672.00 in Pcm Fund on August 28, 2024 and sell it today you would earn a total of 128.00 from holding Pcm Fund or generate 19.05% 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. Pcm Fund
Performance |
| Timeline |
| Merck Company |
| Pcm Fund |
Merck and Pcm Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Pcm Fund
The main advantage of trading using opposite Merck and Pcm Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Pcm Fund 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 Pcm Fund will offset losses from the drop in Pcm Fund's long position.| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
| Pcm Fund vs. Pimco High Income | Pcm Fund vs. Pimco Income Strategy | Pcm Fund vs. Pimco Corporate Income | Pcm Fund vs. PIMCO Access Income |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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