Correlation Between Minerals Technologies and MERCK
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By analyzing existing cross correlation between Minerals Technologies and MERCK INC, you can compare the effects of market volatilities on Minerals Technologies and MERCK 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 Minerals Technologies with a short position of MERCK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minerals Technologies and MERCK.
Diversification Opportunities for Minerals Technologies and MERCK
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Minerals and MERCK is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Minerals Technologies and MERCK INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MERCK INC and Minerals Technologies 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 Minerals Technologies are associated (or correlated) with MERCK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MERCK INC has no effect on the direction of Minerals Technologies i.e., Minerals Technologies and MERCK go up and down completely randomly.
Pair Corralation between Minerals Technologies and MERCK
Considering the 90-day investment horizon Minerals Technologies is expected to generate 3.52 times more return on investment than MERCK. However, Minerals Technologies is 3.52 times more volatile than MERCK INC. It trades about 0.07 of its potential returns per unit of risk. MERCK INC is currently generating about 0.0 per unit of risk. If you would invest 5,658 in Minerals Technologies on September 1, 2024 and sell it today you would earn a total of 2,499 from holding Minerals Technologies or generate 44.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.92% |
| Values | Daily Returns |
Minerals Technologies vs. MERCK INC
Performance |
| Timeline |
| Minerals Technologies |
| MERCK INC |
Minerals Technologies and MERCK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minerals Technologies and MERCK
The main advantage of trading using opposite Minerals Technologies and MERCK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minerals Technologies position performs unexpectedly, MERCK 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 MERCK will offset losses from the drop in MERCK's long position.| Minerals Technologies vs. Linde plc Ordinary | Minerals Technologies vs. Air Products and | Minerals Technologies vs. Aquagold International | Minerals Technologies vs. Thrivent High Yield |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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