Correlation Between Merck and SatixFy Communications
Can any of the company-specific risk be diversified away by investing in both Merck and SatixFy Communications 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 SatixFy Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and SatixFy Communications, you can compare the effects of market volatilities on Merck and SatixFy Communications 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 SatixFy Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and SatixFy Communications.
Diversification Opportunities for Merck and SatixFy Communications
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merck and SatixFy is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and SatixFy Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SatixFy Communications 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 SatixFy Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SatixFy Communications has no effect on the direction of Merck i.e., Merck and SatixFy Communications go up and down completely randomly.
Pair Corralation between Merck and SatixFy Communications
Considering the 90-day investment horizon Merck Company is expected to under-perform the SatixFy Communications. But the stock apears to be less risky and, when comparing its historical volatility, Merck Company is 4.32 times less risky than SatixFy Communications. The stock trades about 0.0 of its potential returns per unit of risk. The SatixFy Communications is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 45.00 in SatixFy Communications on August 31, 2024 and sell it today you would earn a total of 45.00 from holding SatixFy Communications or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merck Company vs. SatixFy Communications
Performance |
| Timeline |
| Merck Company |
| SatixFy Communications |
Merck and SatixFy Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and SatixFy Communications
The main advantage of trading using opposite Merck and SatixFy Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, SatixFy Communications 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 SatixFy Communications will offset losses from the drop in SatixFy Communications' long position.The idea behind Merck Company and SatixFy Communications 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.| SatixFy Communications vs. Actelis Networks | SatixFy Communications vs. ClearOne | SatixFy Communications vs. Siyata Mobile | SatixFy Communications vs. Mobilicom Limited Warrants |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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