Correlation Between Merck and ACTIVISION
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By analyzing existing cross correlation between Merck Company and ACTIVISION BLIZZARD INC, you can compare the effects of market volatilities on Merck and ACTIVISION 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 ACTIVISION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and ACTIVISION.
Diversification Opportunities for Merck and ACTIVISION
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and ACTIVISION is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and ACTIVISION BLIZZARD INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACTIVISION BLIZZARD 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 ACTIVISION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACTIVISION BLIZZARD INC has no effect on the direction of Merck i.e., Merck and ACTIVISION go up and down completely randomly.
Pair Corralation between Merck and ACTIVISION
Considering the 90-day investment horizon Merck Company is expected to under-perform the ACTIVISION. In addition to that, Merck is 1.26 times more volatile than ACTIVISION BLIZZARD INC. It trades about -0.17 of its total potential returns per unit of risk. ACTIVISION BLIZZARD INC is currently generating about -0.18 per unit of volatility. If you would invest 9,640 in ACTIVISION BLIZZARD INC on August 31, 2024 and sell it today you would lose (256.00) from holding ACTIVISION BLIZZARD INC or give up 2.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 34.09% |
| Values | Daily Returns |
Merck Company vs. ACTIVISION BLIZZARD INC
Performance |
| Timeline |
| Merck Company |
| ACTIVISION BLIZZARD INC |
Merck and ACTIVISION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and ACTIVISION
The main advantage of trading using opposite Merck and ACTIVISION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, ACTIVISION 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 ACTIVISION will offset losses from the drop in ACTIVISION's long position.The idea behind Merck Company and ACTIVISION BLIZZARD INC 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.| ACTIVISION vs. AEP TEX INC | ACTIVISION vs. US BANK NATIONAL | ACTIVISION vs. Bank of America | ACTIVISION vs. GE Aerospace |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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