Correlation Between Merck and Tricon Capital
Can any of the company-specific risk be diversified away by investing in both Merck and Tricon Capital 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 Tricon Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Tricon Capital Group, you can compare the effects of market volatilities on Merck and Tricon Capital 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 Tricon Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Tricon Capital.
Diversification Opportunities for Merck and Tricon Capital
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Tricon is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Tricon Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tricon Capital Group 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 Tricon Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tricon Capital Group has no effect on the direction of Merck i.e., Merck and Tricon Capital go up and down completely randomly.
Pair Corralation between Merck and Tricon Capital
If you would invest 938.00 in Tricon Capital Group on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Tricon Capital Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Merck Company vs. Tricon Capital Group
Performance |
| Timeline |
| Merck Company |
| Tricon Capital Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Tricon Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Tricon Capital
The main advantage of trading using opposite Merck and Tricon Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Tricon Capital 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 Tricon Capital will offset losses from the drop in Tricon Capital's long position.| Merck vs. Pfizer Inc | Merck vs. Johnson Johnson | Merck vs. Highway Holdings Limited | Merck vs. QCR Holdings |
| Tricon Capital vs. Marcus Millichap | Tricon Capital vs. Frp Holdings Ord | Tricon Capital vs. Maui Land Pineapple | Tricon Capital vs. Brookfield Property Partners |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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