Correlation Between Merck and AUTOZONE
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By analyzing existing cross correlation between Merck Company and AUTOZONE INC 375, you can compare the effects of market volatilities on Merck and AUTOZONE 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 AUTOZONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and AUTOZONE.
Diversification Opportunities for Merck and AUTOZONE
Very poor diversification
The 3 months correlation between Merck and AUTOZONE is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and AUTOZONE INC 375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUTOZONE INC 375 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 AUTOZONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUTOZONE INC 375 has no effect on the direction of Merck i.e., Merck and AUTOZONE go up and down completely randomly.
Pair Corralation between Merck and AUTOZONE
Considering the 90-day investment horizon Merck Company is expected to under-perform the AUTOZONE. In addition to that, Merck is 2.53 times more volatile than AUTOZONE INC 375. It trades about -0.17 of its total potential returns per unit of risk. AUTOZONE INC 375 is currently generating about -0.16 per unit of volatility. If you would invest 9,805 in AUTOZONE INC 375 on August 26, 2024 and sell it today you would lose (164.00) from holding AUTOZONE INC 375 or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merck Company vs. AUTOZONE INC 375
Performance |
| Timeline |
| Merck Company |
| AUTOZONE INC 375 |
Merck and AUTOZONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and AUTOZONE
The main advantage of trading using opposite Merck and AUTOZONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, AUTOZONE 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 AUTOZONE will offset losses from the drop in AUTOZONE's long position.| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
| AUTOZONE vs. The Coca Cola | AUTOZONE vs. JPMorgan Chase Co | AUTOZONE vs. Dupont De Nemours | AUTOZONE vs. Alcoa 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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