Correlation Between Merck and 097023AQ8
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By analyzing existing cross correlation between Merck Company and BA 75 15 AUG 42, you can compare the effects of market volatilities on Merck and 097023AQ8 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 097023AQ8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and 097023AQ8.
Diversification Opportunities for Merck and 097023AQ8
Very good diversification
The 3 months correlation between Merck and 097023AQ8 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and BA 75 15 AUG 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 097023AQ8 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 097023AQ8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 097023AQ8 has no effect on the direction of Merck i.e., Merck and 097023AQ8 go up and down completely randomly.
Pair Corralation between Merck and 097023AQ8
Considering the 90-day investment horizon Merck is expected to generate 16.83 times less return on investment than 097023AQ8. But when comparing it to its historical volatility, Merck Company is 3.23 times less risky than 097023AQ8. It trades about 0.0 of its potential returns per unit of risk. BA 75 15 AUG 42 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 11,113 in BA 75 15 AUG 42 on September 1, 2024 and sell it today you would lose (63.00) from holding BA 75 15 AUG 42 or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 28.48% |
| Values | Daily Returns |
Merck Company vs. BA 75 15 AUG 42
Performance |
| Timeline |
| Merck Company |
| 097023AQ8 |
Merck and 097023AQ8 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and 097023AQ8
The main advantage of trading using opposite Merck and 097023AQ8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, 097023AQ8 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 097023AQ8 will offset losses from the drop in 097023AQ8's long position.The idea behind Merck Company and BA 75 15 AUG 42 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.| 097023AQ8 vs. ATT Inc | 097023AQ8 vs. Home Depot | 097023AQ8 vs. Cisco Systems | 097023AQ8 vs. Dupont De Nemours |
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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