Correlation Between Merck and Cushing Mlp
Can any of the company-specific risk be diversified away by investing in both Merck and Cushing Mlp 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 Cushing Mlp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Cushing Mlp Total, you can compare the effects of market volatilities on Merck and Cushing Mlp 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 Cushing Mlp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Cushing Mlp.
Diversification Opportunities for Merck and Cushing Mlp
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merck and Cushing is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Cushing Mlp Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cushing Mlp Total 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 Cushing Mlp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cushing Mlp Total has no effect on the direction of Merck i.e., Merck and Cushing Mlp go up and down completely randomly.
Pair Corralation between Merck and Cushing Mlp
Considering the 90-day investment horizon Merck Company is expected to under-perform the Cushing Mlp. But the stock apears to be less risky and, when comparing its historical volatility, Merck Company is 1.31 times less risky than Cushing Mlp. The stock trades about -0.18 of its potential returns per unit of risk. The Cushing Mlp Total is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,042 in Cushing Mlp Total on August 29, 2024 and sell it today you would earn a total of 420.00 from holding Cushing Mlp Total or generate 10.39% 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. Cushing Mlp Total
Performance |
| Timeline |
| Merck Company |
| Cushing Mlp Total |
Merck and Cushing Mlp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Cushing Mlp
The main advantage of trading using opposite Merck and Cushing Mlp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Cushing Mlp 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 Cushing Mlp will offset losses from the drop in Cushing Mlp's long position.| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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