Correlation Between Merck and Kelly Strategic
Can any of the company-specific risk be diversified away by investing in both Merck and Kelly Strategic 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 Kelly Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Kelly Strategic Management, you can compare the effects of market volatilities on Merck and Kelly Strategic 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 Kelly Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Kelly Strategic.
Diversification Opportunities for Merck and Kelly Strategic
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Kelly is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Kelly Strategic Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelly Strategic Mana 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 Kelly Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelly Strategic Mana has no effect on the direction of Merck i.e., Merck and Kelly Strategic go up and down completely randomly.
Pair Corralation between Merck and Kelly Strategic
If you would invest (100.00) in Kelly Strategic Management on September 2, 2024 and sell it today you would earn a total of 100.00 from holding Kelly Strategic Management or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Merck Company vs. Kelly Strategic Management
Performance |
| Timeline |
| Merck Company |
| Kelly Strategic Mana |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Kelly Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Kelly Strategic
The main advantage of trading using opposite Merck and Kelly Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Kelly Strategic 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 Kelly Strategic will offset losses from the drop in Kelly Strategic's long position.The idea behind Merck Company and Kelly Strategic Management pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kelly Strategic vs. RLJ Lodging Trust | Kelly Strategic vs. Nexpoint Residential Trust | Kelly Strategic vs. Urban Edge Properties | Kelly Strategic vs. Terreno Realty |
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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