Correlation Between Merck and 071813BY4
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By analyzing existing cross correlation between Merck Company and BAX 395 01 APR 30, you can compare the effects of market volatilities on Merck and 071813BY4 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 071813BY4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and 071813BY4.
Diversification Opportunities for Merck and 071813BY4
Very poor diversification
The 3 months correlation between Merck and 071813BY4 is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and BAX 395 01 APR 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 071813BY4 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 071813BY4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 071813BY4 has no effect on the direction of Merck i.e., Merck and 071813BY4 go up and down completely randomly.
Pair Corralation between Merck and 071813BY4
Considering the 90-day investment horizon Merck Company is expected to under-perform the 071813BY4. In addition to that, Merck is 2.43 times more volatile than BAX 395 01 APR 30. It trades about -0.09 of its total potential returns per unit of risk. BAX 395 01 APR 30 is currently generating about 0.0 per unit of volatility. If you would invest 9,240 in BAX 395 01 APR 30 on September 3, 2024 and sell it today you would lose (42.00) from holding BAX 395 01 APR 30 or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 92.47% |
| Values | Daily Returns |
Merck Company vs. BAX 395 01 APR 30
Performance |
| Timeline |
| Merck Company |
| 071813BY4 |
Merck and 071813BY4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and 071813BY4
The main advantage of trading using opposite Merck and 071813BY4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, 071813BY4 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 071813BY4 will offset losses from the drop in 071813BY4's long position.| Merck vs. Pfizer Inc | Merck vs. Johnson Johnson | Merck vs. Highway Holdings Limited | Merck vs. QCR Holdings |
| 071813BY4 vs. AEP TEX INC | 071813BY4 vs. US BANK NATIONAL | 071813BY4 vs. MetLife | 071813BY4 vs. Brera Holdings PLC |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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