Correlation Between Merck and GWOCN
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By analyzing existing cross correlation between Merck Company and GWOCN 415 03 JUN 47, you can compare the effects of market volatilities on Merck and GWOCN 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 GWOCN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and GWOCN.
Diversification Opportunities for Merck and GWOCN
Excellent diversification
The 3 months correlation between Merck and GWOCN is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and GWOCN 415 03 JUN 47 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GWOCN 415 03 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 GWOCN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GWOCN 415 03 has no effect on the direction of Merck i.e., Merck and GWOCN go up and down completely randomly.
Pair Corralation between Merck and GWOCN
Considering the 90-day investment horizon Merck Company is expected to generate 0.87 times more return on investment than GWOCN. However, Merck Company is 1.14 times less risky than GWOCN. It trades about 0.01 of its potential returns per unit of risk. GWOCN 415 03 JUN 47 is currently generating about -0.02 per unit of risk. If you would invest 10,107 in Merck Company on September 3, 2024 and sell it today you would lose (46.00) from holding Merck Company or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 23.48% |
| Values | Daily Returns |
Merck Company vs. GWOCN 415 03 JUN 47
Performance |
| Timeline |
| Merck Company |
| GWOCN 415 03 |
Merck and GWOCN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and GWOCN
The main advantage of trading using opposite Merck and GWOCN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, GWOCN 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 GWOCN will offset losses from the drop in GWOCN's long position.| Merck vs. Pfizer Inc | Merck vs. Johnson Johnson | Merck vs. Highway Holdings Limited | Merck vs. QCR Holdings |
| GWOCN vs. Guangdong Investment Limited | GWOCN vs. Aegon NV ADR | GWOCN vs. Hafnia Limited | GWOCN vs. Comstock Holding Companies |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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