Correlation Between Merck and 06051GGA1
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By analyzing existing cross correlation between Merck Company and BANK AMER P, you can compare the effects of market volatilities on Merck and 06051GGA1 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 06051GGA1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and 06051GGA1.
Diversification Opportunities for Merck and 06051GGA1
Poor diversification
The 3 months correlation between Merck and 06051GGA1 is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and BANK AMER P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK AMER P 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 06051GGA1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK AMER P has no effect on the direction of Merck i.e., Merck and 06051GGA1 go up and down completely randomly.
Pair Corralation between Merck and 06051GGA1
Considering the 90-day investment horizon Merck Company is expected to generate 0.74 times more return on investment than 06051GGA1. However, Merck Company is 1.35 times less risky than 06051GGA1. It trades about -0.1 of its potential returns per unit of risk. BANK AMER P is currently generating about -0.22 per unit of risk. If you would invest 10,423 in Merck Company on August 28, 2024 and sell it today you would lose (307.00) from holding Merck Company or give up 2.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Merck Company vs. BANK AMER P
Performance |
| Timeline |
| Merck Company |
| BANK AMER P |
Merck and 06051GGA1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and 06051GGA1
The main advantage of trading using opposite Merck and 06051GGA1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, 06051GGA1 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 06051GGA1 will offset losses from the drop in 06051GGA1's long position.| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
| 06051GGA1 vs. AEP TEX INC | 06051GGA1 vs. US BANK NATIONAL | 06051GGA1 vs. Eat Beyond Global | 06051GGA1 vs. Charles Schwab 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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