Correlation Between Merck and FISERV
Specify exactly 2 symbols:
By analyzing existing cross correlation between Merck Company and FISERV INC, you can compare the effects of market volatilities on Merck and FISERV 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 FISERV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and FISERV.
Diversification Opportunities for Merck and FISERV
Poor diversification
The 3 months correlation between Merck and FISERV is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and FISERV INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FISERV 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 FISERV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FISERV INC has no effect on the direction of Merck i.e., Merck and FISERV go up and down completely randomly.
Pair Corralation between Merck and FISERV
Considering the 90-day investment horizon Merck Company is expected to generate 4.98 times more return on investment than FISERV. However, Merck is 4.98 times more volatile than FISERV INC. It trades about 0.01 of its potential returns per unit of risk. FISERV INC is currently generating about 0.02 per unit of risk. If you would invest 10,120 in Merck Company on September 2, 2024 and sell it today you would earn a total of 44.00 from holding Merck Company or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Merck Company vs. FISERV INC
Performance |
| Timeline |
| Merck Company |
| FISERV INC |
Merck and FISERV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and FISERV
The main advantage of trading using opposite Merck and FISERV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, FISERV 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 FISERV will offset losses from the drop in FISERV's long position.The idea behind Merck Company and FISERV 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.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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |