Correlation Between Merck and Thorne HealthTech
Can any of the company-specific risk be diversified away by investing in both Merck and Thorne HealthTech 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 Thorne HealthTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Thorne HealthTech, you can compare the effects of market volatilities on Merck and Thorne HealthTech 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 Thorne HealthTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Thorne HealthTech.
Diversification Opportunities for Merck and Thorne HealthTech
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merck and Thorne is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Thorne HealthTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thorne HealthTech 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 Thorne HealthTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thorne HealthTech has no effect on the direction of Merck i.e., Merck and Thorne HealthTech go up and down completely randomly.
Pair Corralation between Merck and Thorne HealthTech
If you would invest 640.00 in Thorne HealthTech on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Thorne HealthTech or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Merck Company vs. Thorne HealthTech
Performance |
| Timeline |
| Merck Company |
| Thorne HealthTech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Thorne HealthTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Thorne HealthTech
The main advantage of trading using opposite Merck and Thorne HealthTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Thorne HealthTech 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 Thorne HealthTech will offset losses from the drop in Thorne HealthTech's long position.| Merck vs. Pharvaris BV | Merck vs. Brinker International | Merck vs. Alcoa Corp | Merck vs. Direxion Daily FTSE |
| Thorne HealthTech vs. Seneca Foods Corp | Thorne HealthTech vs. Central Garden Pet | Thorne HealthTech vs. Central Garden Pet | Thorne HealthTech vs. Natures Sunshine Products |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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