Correlation Between Merck and BCECN
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By analyzing existing cross correlation between Merck Company and BCECN 215 15 FEB 32, you can compare the effects of market volatilities on Merck and BCECN 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 BCECN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and BCECN.
Diversification Opportunities for Merck and BCECN
Poor diversification
The 3 months correlation between Merck and BCECN is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and BCECN 215 15 FEB 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCECN 215 15 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 BCECN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCECN 215 15 has no effect on the direction of Merck i.e., Merck and BCECN go up and down completely randomly.
Pair Corralation between Merck and BCECN
Considering the 90-day investment horizon Merck Company is expected to generate 1.58 times more return on investment than BCECN. However, Merck is 1.58 times more volatile than BCECN 215 15 FEB 32. It trades about -0.02 of its potential returns per unit of risk. BCECN 215 15 FEB 32 is currently generating about -0.21 per unit of risk. If you would invest 10,073 in Merck Company on September 12, 2024 and sell it today you would lose (97.00) from holding Merck Company or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Merck Company vs. BCECN 215 15 FEB 32
Performance |
| Timeline |
| Merck Company |
| BCECN 215 15 |
Merck and BCECN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and BCECN
The main advantage of trading using opposite Merck and BCECN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, BCECN 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 BCECN will offset losses from the drop in BCECN's long position.| Merck vs. Victory Integrity Smallmid Cap | Merck vs. Hilton Worldwide Holdings | Merck vs. NVIDIA | Merck vs. JPMorgan Chase Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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