Correlation Between Merck and DEUTSCHE
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By analyzing existing cross correlation between Merck Company and DEUTSCHE BANK AG, you can compare the effects of market volatilities on Merck and DEUTSCHE 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 DEUTSCHE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and DEUTSCHE.
Diversification Opportunities for Merck and DEUTSCHE
Modest diversification
The 3 months correlation between Merck and DEUTSCHE is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and DEUTSCHE BANK AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEUTSCHE BANK 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 DEUTSCHE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEUTSCHE BANK AG has no effect on the direction of Merck i.e., Merck and DEUTSCHE go up and down completely randomly.
Pair Corralation between Merck and DEUTSCHE
Considering the 90-day investment horizon Merck Company is expected to under-perform the DEUTSCHE. In addition to that, Merck is 1.45 times more volatile than DEUTSCHE BANK AG. It trades about -0.19 of its total potential returns per unit of risk. DEUTSCHE BANK AG is currently generating about -0.19 per unit of volatility. If you would invest 9,639 in DEUTSCHE BANK AG on October 28, 2024 and sell it today you would lose (238.00) from holding DEUTSCHE BANK AG or give up 2.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 84.21% |
| Values | Daily Returns |
Merck Company vs. DEUTSCHE BANK AG
Performance |
| Timeline |
| Merck Company |
| DEUTSCHE BANK AG |
Merck and DEUTSCHE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and DEUTSCHE
The main advantage of trading using opposite Merck and DEUTSCHE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, DEUTSCHE 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 DEUTSCHE will offset losses from the drop in DEUTSCHE's long position.| Merck vs. Collegium Pharmaceutical | Merck vs. Phibro Animal Health | Merck vs. ANI Pharmaceuticals | Merck vs. Procaps Group SA |
| DEUTSCHE vs. Valneva SE ADR | DEUTSCHE vs. Life360, Common Stock | DEUTSCHE vs. Viemed Healthcare | DEUTSCHE vs. DHI Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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