Correlation Between Merck and 00108WAF7
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By analyzing existing cross correlation between Merck Company and AEP TEX INC, you can compare the effects of market volatilities on Merck and 00108WAF7 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 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and 00108WAF7.
Diversification Opportunities for Merck and 00108WAF7
Average diversification
The 3 months correlation between Merck and 00108WAF7 is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and AEP TEX INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEP TEX INC 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 00108WAF7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEP TEX INC has no effect on the direction of Merck i.e., Merck and 00108WAF7 go up and down completely randomly.
Pair Corralation between Merck and 00108WAF7
Considering the 90-day investment horizon Merck Company is expected to under-perform the 00108WAF7. But the stock apears to be less risky and, when comparing its historical volatility, Merck Company is 2.57 times less risky than 00108WAF7. The stock trades about -0.1 of its potential returns per unit of risk. The AEP TEX INC is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 7,420 in AEP TEX INC on August 28, 2024 and sell it today you would earn a total of 801.00 from holding AEP TEX INC or generate 10.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 63.64% |
| Values | Daily Returns |
Merck Company vs. AEP TEX INC
Performance |
| Timeline |
| Merck Company |
| AEP TEX INC |
Merck and 00108WAF7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and 00108WAF7
The main advantage of trading using opposite Merck and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, 00108WAF7 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 00108WAF7 will offset losses from the drop in 00108WAF7's long position.| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
| 00108WAF7 vs. US BANK NATIONAL | 00108WAF7 vs. Dupont De Nemours | 00108WAF7 vs. The Travelers Companies | 00108WAF7 vs. Exxon Mobil Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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