Correlation Between 00108WAF7 and MERCK
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By analyzing existing cross correlation between AEP TEX INC and MERCK INC, you can compare the effects of market volatilities on 00108WAF7 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 00108WAF7 with a short position of MERCK. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and MERCK.
Diversification Opportunities for 00108WAF7 and MERCK
Very weak diversification
The 3 months correlation between 00108WAF7 and MERCK is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and MERCK INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MERCK INC and 00108WAF7 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 AEP TEX INC 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 00108WAF7 i.e., 00108WAF7 and MERCK go up and down completely randomly.
Pair Corralation between 00108WAF7 and MERCK
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 1.86 times more return on investment than MERCK. However, 00108WAF7 is 1.86 times more volatile than MERCK INC. It trades about 0.12 of its potential returns per unit of risk. MERCK INC is currently generating about 0.06 per unit of risk. If you would invest 7,628 in AEP TEX INC on November 29, 2024 and sell it today you would lose (89.00) from holding AEP TEX INC or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 71.7% |
| Values | Daily Returns |
AEP TEX INC vs. MERCK INC
Performance |
| Timeline |
| AEP TEX INC |
| MERCK INC |
00108WAF7 and MERCK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 00108WAF7 and MERCK
The main advantage of trading using opposite 00108WAF7 and MERCK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 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.| 00108WAF7 vs. Emerson Radio | 00108WAF7 vs. Acumen Pharmaceuticals | 00108WAF7 vs. Spyre Therapeutics | 00108WAF7 vs. Thor Industries |
| MERCK vs. National Waste Management | MERCK vs. Logan Ridge Finance | MERCK vs. SLR Investment Corp | MERCK vs. FS KKR Capital |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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