Correlation Between Merck and 25160PAE7
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By analyzing existing cross correlation between Merck Company and DEUTSCHE BK AG, you can compare the effects of market volatilities on Merck and 25160PAE7 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 25160PAE7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and 25160PAE7.
Diversification Opportunities for Merck and 25160PAE7
Poor diversification
The 3 months correlation between Merck and 25160PAE7 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and DEUTSCHE BK AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEUTSCHE BK AG 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 25160PAE7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEUTSCHE BK AG has no effect on the direction of Merck i.e., Merck and 25160PAE7 go up and down completely randomly.
Pair Corralation between Merck and 25160PAE7
Considering the 90-day investment horizon Merck Company is expected to under-perform the 25160PAE7. In addition to that, Merck is 1.9 times more volatile than DEUTSCHE BK AG. It trades about -0.14 of its total potential returns per unit of risk. DEUTSCHE BK AG is currently generating about -0.13 per unit of volatility. If you would invest 10,055 in DEUTSCHE BK AG on October 28, 2024 and sell it today you would lose (213.00) from holding DEUTSCHE BK AG or give up 2.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 64.1% |
| Values | Daily Returns |
Merck Company vs. DEUTSCHE BK AG
Performance |
| Timeline |
| Merck Company |
| DEUTSCHE BK AG |
Merck and 25160PAE7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and 25160PAE7
The main advantage of trading using opposite Merck and 25160PAE7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, 25160PAE7 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 25160PAE7 will offset losses from the drop in 25160PAE7's long position.| Merck vs. Collegium Pharmaceutical | Merck vs. Phibro Animal Health | Merck vs. ANI Pharmaceuticals | Merck vs. Procaps Group SA |
| 25160PAE7 vs. Kuya Silver | 25160PAE7 vs. Freedom Holding Corp | 25160PAE7 vs. Hudson Acquisition I | 25160PAE7 vs. Vindicator Silver Lead 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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