Correlation Between Merck and 40434LAC9
Specify exactly 2 symbols:
By analyzing existing cross correlation between Merck Company and HP INC, you can compare the effects of market volatilities on Merck and 40434LAC9 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 40434LAC9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and 40434LAC9.
Diversification Opportunities for Merck and 40434LAC9
Very poor diversification
The 3 months correlation between Merck and 40434LAC9 is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and HP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 40434LAC9 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 40434LAC9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 40434LAC9 has no effect on the direction of Merck i.e., Merck and 40434LAC9 go up and down completely randomly.
Pair Corralation between Merck and 40434LAC9
Considering the 90-day investment horizon Merck Company is expected to under-perform the 40434LAC9. But the stock apears to be less risky and, when comparing its historical volatility, Merck Company is 1.42 times less risky than 40434LAC9. The stock trades about -0.1 of its potential returns per unit of risk. The HP INC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 9,247 in HP INC on August 27, 2024 and sell it today you would earn a total of 11.00 from holding HP INC or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Merck Company vs. HP INC
Performance |
| Timeline |
| Merck Company |
| 40434LAC9 |
Merck and 40434LAC9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and 40434LAC9
The main advantage of trading using opposite Merck and 40434LAC9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, 40434LAC9 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 40434LAC9 will offset losses from the drop in 40434LAC9's long position.| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
| 40434LAC9 vs. AEP TEX INC | 40434LAC9 vs. US BANK NATIONAL | 40434LAC9 vs. Omega Healthcare Investors | 40434LAC9 vs. Zoom Video Communications |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |