Correlation Between Merck and TRUIST
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By analyzing existing cross correlation between Merck Company and TRUIST BANK, you can compare the effects of market volatilities on Merck and TRUIST 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 TRUIST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and TRUIST.
Diversification Opportunities for Merck and TRUIST
Very good diversification
The 3 months correlation between Merck and TRUIST is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and TRUIST BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRUIST BANK 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 TRUIST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRUIST BANK has no effect on the direction of Merck i.e., Merck and TRUIST go up and down completely randomly.
Pair Corralation between Merck and TRUIST
Considering the 90-day investment horizon Merck is expected to generate 2833.88 times less return on investment than TRUIST. But when comparing it to its historical volatility, Merck Company is 69.72 times less risky than TRUIST. It trades about 0.0 of its potential returns per unit of risk. TRUIST BANK is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9,285 in TRUIST BANK on August 28, 2024 and sell it today you would earn a total of 29.00 from holding TRUIST BANK or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.04% |
| Values | Daily Returns |
Merck Company vs. TRUIST BANK
Performance |
| Timeline |
| Merck Company |
| TRUIST BANK |
Merck and TRUIST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and TRUIST
The main advantage of trading using opposite Merck and TRUIST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, TRUIST 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 TRUIST will offset losses from the drop in TRUIST's long position.| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
| TRUIST vs. Alta Equipment Group | TRUIST vs. Custom Truck One | TRUIST vs. American Airlines Group | TRUIST vs. Mesa Air Group |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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