Correlation Between Merck and 548661EJ2
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By analyzing existing cross correlation between Merck Company and LOW 425 01 APR 52, you can compare the effects of market volatilities on Merck and 548661EJ2 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 548661EJ2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and 548661EJ2.
Diversification Opportunities for Merck and 548661EJ2
Very weak diversification
The 3 months correlation between Merck and 548661EJ2 is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and LOW 425 01 APR 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOW 425 01 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 548661EJ2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOW 425 01 has no effect on the direction of Merck i.e., Merck and 548661EJ2 go up and down completely randomly.
Pair Corralation between Merck and 548661EJ2
Considering the 90-day investment horizon Merck Company is expected to under-perform the 548661EJ2. In addition to that, Merck is 1.31 times more volatile than LOW 425 01 APR 52. It trades about -0.02 of its total potential returns per unit of risk. LOW 425 01 APR 52 is currently generating about 0.21 per unit of volatility. If you would invest 8,061 in LOW 425 01 APR 52 on September 12, 2024 and sell it today you would earn a total of 377.00 from holding LOW 425 01 APR 52 or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Merck Company vs. LOW 425 01 APR 52
Performance |
| Timeline |
| Merck Company |
| LOW 425 01 |
Merck and 548661EJ2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and 548661EJ2
The main advantage of trading using opposite Merck and 548661EJ2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, 548661EJ2 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 548661EJ2 will offset losses from the drop in 548661EJ2's long position.| Merck vs. Victory Integrity Smallmid Cap | Merck vs. Hilton Worldwide Holdings | Merck vs. NVIDIA | Merck vs. JPMorgan Chase Co |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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