Correlation Between Merck and CITIGROUP
Specify exactly 2 symbols:
By analyzing existing cross correlation between Merck Company and CITIGROUP FDG INC, you can compare the effects of market volatilities on Merck and CITIGROUP 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 CITIGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and CITIGROUP.
Diversification Opportunities for Merck and CITIGROUP
Very good diversification
The 3 months correlation between Merck and CITIGROUP is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and CITIGROUP FDG INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP FDG INC 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 CITIGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIGROUP FDG INC has no effect on the direction of Merck i.e., Merck and CITIGROUP go up and down completely randomly.
Pair Corralation between Merck and CITIGROUP
Considering the 90-day investment horizon Merck Company is expected to generate 0.26 times more return on investment than CITIGROUP. However, Merck Company is 3.8 times less risky than CITIGROUP. It trades about -0.02 of its potential returns per unit of risk. CITIGROUP FDG INC is currently generating about -0.16 per unit of risk. If you would invest 10,232 in Merck Company on September 1, 2024 and sell it today you would lose (68.00) from holding Merck Company or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 33.33% |
| Values | Daily Returns |
Merck Company vs. CITIGROUP FDG INC
Performance |
| Timeline |
| Merck Company |
| CITIGROUP FDG INC |
Merck and CITIGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and CITIGROUP
The main advantage of trading using opposite Merck and CITIGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, CITIGROUP 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 CITIGROUP will offset losses from the drop in CITIGROUP's long position.The idea behind Merck Company and CITIGROUP FDG INC 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.| CITIGROUP vs. Lincoln Educational Services | CITIGROUP vs. Grupo Televisa SAB | CITIGROUP vs. Radcom | CITIGROUP vs. WEBTOON Entertainment Common |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |