Correlation Between Merck and Horizon Kinetics
Can any of the company-specific risk be diversified away by investing in both Merck and Horizon Kinetics 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 Horizon Kinetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Horizon Kinetics SPAC, you can compare the effects of market volatilities on Merck and Horizon Kinetics 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 Horizon Kinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Horizon Kinetics.
Diversification Opportunities for Merck and Horizon Kinetics
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Horizon is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Horizon Kinetics SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Kinetics SPAC 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 Horizon Kinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Kinetics SPAC has no effect on the direction of Merck i.e., Merck and Horizon Kinetics go up and down completely randomly.
Pair Corralation between Merck and Horizon Kinetics
Considering the 90-day investment horizon Merck is expected to generate 7.68 times less return on investment than Horizon Kinetics. In addition to that, Merck is 2.43 times more volatile than Horizon Kinetics SPAC. It trades about 0.0 of its total potential returns per unit of risk. Horizon Kinetics SPAC is currently generating about 0.03 per unit of volatility. If you would invest 9,679 in Horizon Kinetics SPAC on August 27, 2024 and sell it today you would earn a total of 377.00 from holding Horizon Kinetics SPAC or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Merck Company vs. Horizon Kinetics SPAC
Performance |
| Timeline |
| Merck Company |
| Horizon Kinetics SPAC |
Merck and Horizon Kinetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Horizon Kinetics
The main advantage of trading using opposite Merck and Horizon Kinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Horizon Kinetics 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 Horizon Kinetics will offset losses from the drop in Horizon Kinetics' long position.| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
| Horizon Kinetics vs. Global X Clean | Horizon Kinetics vs. Global X Renewable | Horizon Kinetics vs. Global X Thematic | Horizon Kinetics vs. Global X AgTech |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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