Correlation Between Merck and Sumo Logic
Can any of the company-specific risk be diversified away by investing in both Merck and Sumo Logic 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 Sumo Logic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Sumo Logic, you can compare the effects of market volatilities on Merck and Sumo Logic 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 Sumo Logic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Sumo Logic.
Diversification Opportunities for Merck and Sumo Logic
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Sumo is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Sumo Logic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumo Logic 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 Sumo Logic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumo Logic has no effect on the direction of Merck i.e., Merck and Sumo Logic go up and down completely randomly.
Pair Corralation between Merck and Sumo Logic
If you would invest 1,204 in Sumo Logic on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Sumo Logic or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Merck Company vs. Sumo Logic
Performance |
| Timeline |
| Merck Company |
| Sumo Logic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Sumo Logic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Sumo Logic
The main advantage of trading using opposite Merck and Sumo Logic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Sumo Logic 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 Sumo Logic will offset losses from the drop in Sumo Logic's long position.| Merck vs. Crinetics Pharmaceuticals | Merck vs. Enanta Pharmaceuticals | Merck vs. Amicus Therapeutics | Merck vs. Connect Biopharma Holdings |
| Sumo Logic vs. PagSeguro Digital | Sumo Logic vs. Endava | Sumo Logic vs. Nutanix | Sumo Logic vs. Palo Alto Networks |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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