Correlation Between Merck and Vivani Medical
Can any of the company-specific risk be diversified away by investing in both Merck and Vivani Medical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Merck and Vivani Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Vivani Medical, you can compare the effects of market volatilities on Merck and Vivani Medical 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 Vivani Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Vivani Medical.
Diversification Opportunities for Merck and Vivani Medical
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merck and Vivani is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Vivani Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivani Medical 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 Vivani Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivani Medical has no effect on the direction of Merck i.e., Merck and Vivani Medical go up and down completely randomly.
Pair Corralation between Merck and Vivani Medical
Considering the 90-day investment horizon Merck is expected to generate 46.79 times less return on investment than Vivani Medical. But when comparing it to its historical volatility, Merck Company is 10.38 times less risky than Vivani Medical. It trades about 0.01 of its potential returns per unit of risk. Vivani Medical is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 161.00 in Vivani Medical on August 30, 2024 and sell it today you would lose (16.00) from holding Vivani Medical or give up 9.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merck Company vs. Vivani Medical
Performance |
| Timeline |
| Merck Company |
| Vivani Medical |
Merck and Vivani Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Vivani Medical
The main advantage of trading using opposite Merck and Vivani Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Vivani Medical 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 Vivani Medical will offset losses from the drop in Vivani Medical's long position.| Merck vs. Pharvaris BV | Merck vs. Brinker International | Merck vs. Alcoa Corp | Merck vs. Direxion Daily FTSE |
| Vivani Medical vs. PepGen | Vivani Medical vs. Tyra Biosciences | Vivani Medical vs. Entrada Therapeutics | Vivani Medical vs. Pharvaris BV |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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