Correlation Between Merck and 17305HAA6
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By analyzing existing cross correlation between Merck Company and C 7625 01 DEC 36, you can compare the effects of market volatilities on Merck and 17305HAA6 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 17305HAA6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and 17305HAA6.
Diversification Opportunities for Merck and 17305HAA6
Excellent diversification
The 3 months correlation between Merck and 17305HAA6 is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and C 7625 01 DEC 36 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C 7625 01 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 17305HAA6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C 7625 01 has no effect on the direction of Merck i.e., Merck and 17305HAA6 go up and down completely randomly.
Pair Corralation between Merck and 17305HAA6
Considering the 90-day investment horizon Merck Company is expected to under-perform the 17305HAA6. In addition to that, Merck is 1.61 times more volatile than C 7625 01 DEC 36. It trades about -0.02 of its total potential returns per unit of risk. C 7625 01 DEC 36 is currently generating about 0.12 per unit of volatility. If you would invest 11,188 in C 7625 01 DEC 36 on September 1, 2024 and sell it today you would earn a total of 122.00 from holding C 7625 01 DEC 36 or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 57.14% |
| Values | Daily Returns |
Merck Company vs. C 7625 01 DEC 36
Performance |
| Timeline |
| Merck Company |
| C 7625 01 |
Merck and 17305HAA6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and 17305HAA6
The main advantage of trading using opposite Merck and 17305HAA6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, 17305HAA6 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 17305HAA6 will offset losses from the drop in 17305HAA6's long position.The idea behind Merck Company and C 7625 01 DEC 36 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.| 17305HAA6 vs. Minerals Technologies | 17305HAA6 vs. Amkor Technology | 17305HAA6 vs. Playtika Holding Corp | 17305HAA6 vs. Harmony Gold Mining |
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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