Correlation Between Merck and Silver Spike
Can any of the company-specific risk be diversified away by investing in both Merck and Silver Spike 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 Silver Spike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Silver Spike Investment, you can compare the effects of market volatilities on Merck and Silver Spike 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 Silver Spike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Silver Spike.
Diversification Opportunities for Merck and Silver Spike
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merck and Silver is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Silver Spike Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Spike Investment 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 Silver Spike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Spike Investment has no effect on the direction of Merck i.e., Merck and Silver Spike go up and down completely randomly.
Pair Corralation between Merck and Silver Spike
If you would invest 1,296 in Silver Spike Investment on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Silver Spike Investment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Merck Company vs. Silver Spike Investment
Performance |
| Timeline |
| Merck Company |
| Silver Spike Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Merck and Silver Spike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Silver Spike
The main advantage of trading using opposite Merck and Silver Spike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Silver Spike 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 Silver Spike will offset losses from the drop in Silver Spike's long position.The idea behind Merck Company and Silver Spike Investment 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.| Silver Spike vs. Entourage Health Corp | Silver Spike vs. Avicanna | Silver Spike vs. Benchmark Botanics | Silver Spike vs. Speakeasy Cannabis Club |
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.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |