Correlation Between Merck and Acruence Active
Can any of the company-specific risk be diversified away by investing in both Merck and Acruence Active 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 Acruence Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Acruence Active Hedge, you can compare the effects of market volatilities on Merck and Acruence Active 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 Acruence Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Acruence Active.
Diversification Opportunities for Merck and Acruence Active
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merck and Acruence is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Acruence Active Hedge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acruence Active Hedge 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 Acruence Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acruence Active Hedge has no effect on the direction of Merck i.e., Merck and Acruence Active go up and down completely randomly.
Pair Corralation between Merck and Acruence Active
Considering the 90-day investment horizon Merck Company is expected to under-perform the Acruence Active. But the stock apears to be less risky and, when comparing its historical volatility, Merck Company is 1.06 times less risky than Acruence Active. The stock trades about -0.11 of its potential returns per unit of risk. The Acruence Active Hedge is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,012 in Acruence Active Hedge on September 1, 2024 and sell it today you would earn a total of 402.00 from holding Acruence Active Hedge or generate 19.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Merck Company vs. Acruence Active Hedge
Performance |
| Timeline |
| Merck Company |
| Acruence Active Hedge |
Merck and Acruence Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Acruence Active
The main advantage of trading using opposite Merck and Acruence Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Acruence Active 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 Acruence Active will offset losses from the drop in Acruence Active's long position.The idea behind Merck Company and Acruence Active Hedge 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.| Acruence Active vs. ZEGA Buy and | Acruence Active vs. Innovator Equity Accelerated | Acruence Active vs. Innovator SP 500 | Acruence Active vs. Innovator SP 500 |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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