Correlation Between Merck and TRAVELERS
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By analyzing existing cross correlation between Merck Company and TRAVELERS INS GROUP, you can compare the effects of market volatilities on Merck and TRAVELERS 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 TRAVELERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and TRAVELERS.
Diversification Opportunities for Merck and TRAVELERS
Very good diversification
The 3 months correlation between Merck and TRAVELERS is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and TRAVELERS INS GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVELERS INS 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 TRAVELERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVELERS INS GROUP has no effect on the direction of Merck i.e., Merck and TRAVELERS go up and down completely randomly.
Pair Corralation between Merck and TRAVELERS
Considering the 90-day investment horizon Merck Company is expected to under-perform the TRAVELERS. In addition to that, Merck is 2.63 times more volatile than TRAVELERS INS GROUP. It trades about -0.09 of its total potential returns per unit of risk. TRAVELERS INS GROUP is currently generating about 0.01 per unit of volatility. If you would invest 10,417 in TRAVELERS INS GROUP on August 29, 2024 and sell it today you would earn a total of 13.00 from holding TRAVELERS INS GROUP or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 48.41% |
| Values | Daily Returns |
Merck Company vs. TRAVELERS INS GROUP
Performance |
| Timeline |
| Merck Company |
| TRAVELERS INS GROUP |
Merck and TRAVELERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and TRAVELERS
The main advantage of trading using opposite Merck and TRAVELERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, TRAVELERS 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 TRAVELERS will offset losses from the drop in TRAVELERS's long position.| Merck vs. Pharvaris BV | Merck vs. Brinker International | Merck vs. Alcoa Corp | Merck vs. Direxion Daily FTSE |
| TRAVELERS vs. AEP TEX INC | TRAVELERS vs. US BANK NATIONAL | TRAVELERS vs. Nasdaq Inc | TRAVELERS vs. Vertiv Holdings Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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