Correlation Between Merck and TuSimple Holdings
Can any of the company-specific risk be diversified away by investing in both Merck and TuSimple Holdings 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 TuSimple Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and TuSimple Holdings, you can compare the effects of market volatilities on Merck and TuSimple Holdings 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 TuSimple Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and TuSimple Holdings.
Diversification Opportunities for Merck and TuSimple Holdings
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and TuSimple is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and TuSimple Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TuSimple Holdings 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 TuSimple Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TuSimple Holdings has no effect on the direction of Merck i.e., Merck and TuSimple Holdings go up and down completely randomly.
Pair Corralation between Merck and TuSimple Holdings
If you would invest 210.00 in TuSimple Holdings on September 1, 2024 and sell it today you would earn a total of 0.00 from holding TuSimple Holdings 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. TuSimple Holdings
Performance |
| Timeline |
| Merck Company |
| TuSimple Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and TuSimple Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and TuSimple Holdings
The main advantage of trading using opposite Merck and TuSimple Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, TuSimple Holdings 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 TuSimple Holdings will offset losses from the drop in TuSimple Holdings' long position.The idea behind Merck Company and TuSimple Holdings 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.| TuSimple Holdings vs. ArcBest Corp | TuSimple Holdings vs. Old Dominion Freight | TuSimple Holdings vs. Saia Inc | TuSimple Holdings vs. XPO Logistics |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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