Correlation Between Merck and 191216CY4
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By analyzing existing cross correlation between Merck Company and COCA COLA CO, you can compare the effects of market volatilities on Merck and 191216CY4 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 191216CY4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and 191216CY4.
Diversification Opportunities for Merck and 191216CY4
Very poor diversification
The 3 months correlation between Merck and 191216CY4 is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and COCA COLA CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCA A CO 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 191216CY4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCA A CO has no effect on the direction of Merck i.e., Merck and 191216CY4 go up and down completely randomly.
Pair Corralation between Merck and 191216CY4
Considering the 90-day investment horizon Merck Company is expected to generate 0.99 times more return on investment than 191216CY4. However, Merck Company is 1.01 times less risky than 191216CY4. It trades about -0.01 of its potential returns per unit of risk. COCA COLA CO is currently generating about -0.04 per unit of risk. If you would invest 10,373 in Merck Company on August 30, 2024 and sell it today you would lose (61.00) from holding Merck Company or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.91% |
| Values | Daily Returns |
Merck Company vs. COCA COLA CO
Performance |
| Timeline |
| Merck Company |
| COCA A CO |
Merck and 191216CY4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and 191216CY4
The main advantage of trading using opposite Merck and 191216CY4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, 191216CY4 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 191216CY4 will offset losses from the drop in 191216CY4's long position.| Merck vs. Pharvaris BV | Merck vs. Brinker International | Merck vs. Alcoa Corp | Merck vs. Direxion Daily FTSE |
| 191216CY4 vs. AEP TEX INC | 191216CY4 vs. US BANK NATIONAL | 191216CY4 vs. Nasdaq Inc | 191216CY4 vs. Vertiv Holdings 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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