Correlation Between Merck and 857477BU6
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By analyzing existing cross correlation between Merck Company and STT 4421 13 MAY 33, you can compare the effects of market volatilities on Merck and 857477BU6 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 857477BU6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and 857477BU6.
Diversification Opportunities for Merck and 857477BU6
Very poor diversification
The 3 months correlation between Merck and 857477BU6 is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and STT 4421 13 MAY 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STT 4421 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 857477BU6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STT 4421 13 has no effect on the direction of Merck i.e., Merck and 857477BU6 go up and down completely randomly.
Pair Corralation between Merck and 857477BU6
Considering the 90-day investment horizon Merck Company is expected to under-perform the 857477BU6. In addition to that, Merck is 2.31 times more volatile than STT 4421 13 MAY 33. It trades about -0.01 of its total potential returns per unit of risk. STT 4421 13 MAY 33 is currently generating about 0.0 per unit of volatility. If you would invest 9,541 in STT 4421 13 MAY 33 on August 31, 2024 and sell it today you would lose (57.00) from holding STT 4421 13 MAY 33 or give up 0.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.46% |
| Values | Daily Returns |
Merck Company vs. STT 4421 13 MAY 33
Performance |
| Timeline |
| Merck Company |
| STT 4421 13 |
Merck and 857477BU6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and 857477BU6
The main advantage of trading using opposite Merck and 857477BU6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, 857477BU6 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 857477BU6 will offset losses from the drop in 857477BU6's long position.The idea behind Merck Company and STT 4421 13 MAY 33 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.| 857477BU6 vs. National Beverage Corp | 857477BU6 vs. Fomento Economico Mexicano | 857477BU6 vs. Tesla Inc | 857477BU6 vs. WiMi Hologram Cloud |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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