Correlation Between Merck and STANLN
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By analyzing existing cross correlation between Merck Company and STANLN 7767 16 NOV 28, you can compare the effects of market volatilities on Merck and STANLN 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 STANLN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and STANLN.
Diversification Opportunities for Merck and STANLN
Excellent diversification
The 3 months correlation between Merck and STANLN is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and STANLN 7767 16 NOV 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STANLN 7767 16 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 STANLN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STANLN 7767 16 has no effect on the direction of Merck i.e., Merck and STANLN go up and down completely randomly.
Pair Corralation between Merck and STANLN
Considering the 90-day investment horizon Merck Company is expected to generate 3.44 times more return on investment than STANLN. However, Merck is 3.44 times more volatile than STANLN 7767 16 NOV 28. It trades about 0.01 of its potential returns per unit of risk. STANLN 7767 16 NOV 28 is currently generating about -0.01 per unit of risk. If you would invest 10,003 in Merck Company on September 14, 2024 and sell it today you would earn a total of 198.00 from holding Merck Company or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 53.53% |
| Values | Daily Returns |
Merck Company vs. STANLN 7767 16 NOV 28
Performance |
| Timeline |
| Merck Company |
| STANLN 7767 16 |
Merck and STANLN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and STANLN
The main advantage of trading using opposite Merck and STANLN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, STANLN 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 STANLN will offset losses from the drop in STANLN'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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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