Correlation Between Merck and 80281LAQ8
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By analyzing existing cross correlation between Merck Company and SANTANDER UK GROUP, you can compare the effects of market volatilities on Merck and 80281LAQ8 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 80281LAQ8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and 80281LAQ8.
Diversification Opportunities for Merck and 80281LAQ8
Good diversification
The 3 months correlation between Merck and 80281LAQ8 is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and SANTANDER UK GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANTANDER UK GROUP 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 80281LAQ8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANTANDER UK GROUP has no effect on the direction of Merck i.e., Merck and 80281LAQ8 go up and down completely randomly.
Pair Corralation between Merck and 80281LAQ8
Considering the 90-day investment horizon Merck Company is expected to under-perform the 80281LAQ8. In addition to that, Merck is 3.55 times more volatile than SANTANDER UK GROUP. It trades about -0.16 of its total potential returns per unit of risk. SANTANDER UK GROUP is currently generating about -0.18 per unit of volatility. If you would invest 9,514 in SANTANDER UK GROUP on September 3, 2024 and sell it today you would lose (183.00) from holding SANTANDER UK GROUP or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.57% |
| Values | Daily Returns |
Merck Company vs. SANTANDER UK GROUP
Performance |
| Timeline |
| Merck Company |
| SANTANDER UK GROUP |
Merck and 80281LAQ8 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and 80281LAQ8
The main advantage of trading using opposite Merck and 80281LAQ8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, 80281LAQ8 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 80281LAQ8 will offset losses from the drop in 80281LAQ8's long position.| Merck vs. Pfizer Inc | Merck vs. Johnson Johnson | Merck vs. Highway Holdings Limited | Merck vs. QCR Holdings |
| 80281LAQ8 vs. Genfit | 80281LAQ8 vs. Catalyst Pharmaceuticals | 80281LAQ8 vs. Sellas Life Sciences | 80281LAQ8 vs. Flexible Solutions International |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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