Correlation Between Merck and 606822BZ6
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By analyzing existing cross correlation between Merck Company and MUFG 164 13 OCT 27, you can compare the effects of market volatilities on Merck and 606822BZ6 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 606822BZ6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and 606822BZ6.
Diversification Opportunities for Merck and 606822BZ6
Significant diversification
The 3 months correlation between Merck and 606822BZ6 is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and MUFG 164 13 OCT 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MUFG 164 13 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 606822BZ6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MUFG 164 13 has no effect on the direction of Merck i.e., Merck and 606822BZ6 go up and down completely randomly.
Pair Corralation between Merck and 606822BZ6
Considering the 90-day investment horizon Merck Company is expected to generate 0.76 times more return on investment than 606822BZ6. However, Merck Company is 1.31 times less risky than 606822BZ6. It trades about 0.0 of its potential returns per unit of risk. MUFG 164 13 OCT 27 is currently generating about -0.26 per unit of risk. If you would invest 10,188 in Merck Company on September 2, 2024 and sell it today you would lose (24.00) from holding Merck Company or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 71.43% |
| Values | Daily Returns |
Merck Company vs. MUFG 164 13 OCT 27
Performance |
| Timeline |
| Merck Company |
| MUFG 164 13 |
Merck and 606822BZ6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and 606822BZ6
The main advantage of trading using opposite Merck and 606822BZ6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, 606822BZ6 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 606822BZ6 will offset losses from the drop in 606822BZ6's long position.The idea behind Merck Company and MUFG 164 13 OCT 27 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.| 606822BZ6 vs. Cementos Pacasmayo SAA | 606822BZ6 vs. Parker Hannifin | 606822BZ6 vs. Avient Corp | 606822BZ6 vs. Eldorado Gold Corp |
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