Correlation Between Merck and 345397ZW6
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By analyzing existing cross correlation between Merck Company and Ford Motor Credit, you can compare the effects of market volatilities on Merck and 345397ZW6 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 345397ZW6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and 345397ZW6.
Diversification Opportunities for Merck and 345397ZW6
Modest diversification
The 3 months correlation between Merck and 345397ZW6 is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Ford Motor Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor Credit 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 345397ZW6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ford Motor Credit has no effect on the direction of Merck i.e., Merck and 345397ZW6 go up and down completely randomly.
Pair Corralation between Merck and 345397ZW6
Considering the 90-day investment horizon Merck Company is expected to under-perform the 345397ZW6. In addition to that, Merck is 2.26 times more volatile than Ford Motor Credit. It trades about -0.11 of its total potential returns per unit of risk. Ford Motor Credit is currently generating about -0.04 per unit of volatility. If you would invest 9,753 in Ford Motor Credit on September 2, 2024 and sell it today you would lose (290.00) from holding Ford Motor Credit or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Merck Company vs. Ford Motor Credit
Performance |
| Timeline |
| Merck Company |
| Ford Motor Credit |
Merck and 345397ZW6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and 345397ZW6
The main advantage of trading using opposite Merck and 345397ZW6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, 345397ZW6 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 345397ZW6 will offset losses from the drop in 345397ZW6's long position.The idea behind Merck Company and Ford Motor Credit 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.| 345397ZW6 vs. Willamette Valley Vineyards | 345397ZW6 vs. Celsius Holdings | 345397ZW6 vs. Oatly Group AB | 345397ZW6 vs. SNDL Inc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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