Correlation Between Merck and Sinclair
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By analyzing existing cross correlation between Merck Company and Sinclair Television Group, you can compare the effects of market volatilities on Merck and Sinclair 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 Sinclair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Sinclair.
Diversification Opportunities for Merck and Sinclair
Good diversification
The 3 months correlation between Merck and Sinclair is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Sinclair Television Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinclair Television 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 Sinclair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinclair Television has no effect on the direction of Merck i.e., Merck and Sinclair go up and down completely randomly.
Pair Corralation between Merck and Sinclair
Considering the 90-day investment horizon Merck Company is expected to under-perform the Sinclair. But the stock apears to be less risky and, when comparing its historical volatility, Merck Company is 2.37 times less risky than Sinclair. The stock trades about -0.01 of its potential returns per unit of risk. The Sinclair Television Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7,000 in Sinclair Television Group on August 30, 2024 and sell it today you would earn a total of 550.00 from holding Sinclair Television Group or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Merck Company vs. Sinclair Television Group
Performance |
| Timeline |
| Merck Company |
| Sinclair Television |
Merck and Sinclair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Sinclair
The main advantage of trading using opposite Merck and Sinclair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Sinclair 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 Sinclair will offset losses from the drop in Sinclair's long position.| Merck vs. Emergent Biosolutions | Merck vs. Bausch Health Companies | Merck vs. Neurocrine Biosciences | Merck vs. Teva Pharma Industries |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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