Correlation Between Merck and SITE Centers
Can any of the company-specific risk be diversified away by investing in both Merck and SITE Centers 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 SITE Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and SITE Centers Corp, you can compare the effects of market volatilities on Merck and SITE Centers 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 SITE Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and SITE Centers.
Diversification Opportunities for Merck and SITE Centers
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and SITE is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and SITE Centers Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITE Centers Corp 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 SITE Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITE Centers Corp has no effect on the direction of Merck i.e., Merck and SITE Centers go up and down completely randomly.
Pair Corralation between Merck and SITE Centers
Considering the 90-day investment horizon Merck is expected to generate 4.24 times less return on investment than SITE Centers. In addition to that, Merck is 1.3 times more volatile than SITE Centers Corp. It trades about 0.01 of its total potential returns per unit of risk. SITE Centers Corp is currently generating about 0.04 per unit of volatility. If you would invest 2,310 in SITE Centers Corp on September 5, 2024 and sell it today you would earn a total of 206.00 from holding SITE Centers Corp or generate 8.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.98% |
| Values | Daily Returns |
Merck Company vs. SITE Centers Corp
Performance |
| Timeline |
| Merck Company |
| SITE Centers Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Merck and SITE Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and SITE Centers
The main advantage of trading using opposite Merck and SITE Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, SITE Centers 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 SITE Centers will offset losses from the drop in SITE Centers' long position.| Merck vs. Crinetics Pharmaceuticals | Merck vs. Enanta Pharmaceuticals | Merck vs. Amicus Therapeutics | Merck vs. Connect Biopharma Holdings |
| SITE Centers vs. The Gabelli Multimedia | SITE Centers vs. The Gabelli Equity | SITE Centers vs. Virtus AllianzGI Convertible | SITE Centers vs. John Hancock 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |