Correlation Between Merck and DBX ETF
Can any of the company-specific risk be diversified away by investing in both Merck and DBX 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 DBX 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 DBX ETF Trust, you can compare the effects of market volatilities on Merck and DBX 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 DBX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and DBX ETF.
Diversification Opportunities for Merck and DBX ETF
Pay attention - limited upside
The 3 months correlation between Merck and DBX is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF Trust 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 DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of Merck i.e., Merck and DBX ETF go up and down completely randomly.
Pair Corralation between Merck and DBX ETF
Considering the 90-day investment horizon Merck Company is expected to under-perform the DBX ETF. In addition to that, Merck is 1.93 times more volatile than DBX ETF Trust. It trades about 0.0 of its total potential returns per unit of risk. DBX ETF Trust is currently generating about 0.43 per unit of volatility. If you would invest 5,154 in DBX ETF Trust on September 3, 2024 and sell it today you would earn a total of 309.00 from holding DBX ETF Trust or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merck Company vs. DBX ETF Trust
Performance |
| Timeline |
| Merck Company |
| DBX ETF Trust |
Merck and DBX ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and DBX ETF
The main advantage of trading using opposite Merck and DBX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, DBX 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 DBX ETF will offset losses from the drop in DBX ETF's long position.| Merck vs. Pfizer Inc | Merck vs. Johnson Johnson | Merck vs. Highway Holdings Limited | Merck vs. QCR Holdings |
| DBX ETF vs. SPDR MSCI USA | DBX ETF vs. American Century STOXX | DBX ETF vs. Hartford Multifactor Equity | DBX ETF vs. PIMCO RAFI Dynamic |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |