Correlation Between 90331HPL1 and Merck
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By analyzing existing cross correlation between US BANK NATIONAL and Merck Company, you can compare the effects of market volatilities on 90331HPL1 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 90331HPL1 with a short position of Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of 90331HPL1 and Merck.
Diversification Opportunities for 90331HPL1 and Merck
Weak diversification
The 3 months correlation between 90331HPL1 and Merck is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding US BANK NATIONAL and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company and 90331HPL1 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 US BANK NATIONAL 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 Company has no effect on the direction of 90331HPL1 i.e., 90331HPL1 and Merck go up and down completely randomly.
Pair Corralation between 90331HPL1 and Merck
Assuming the 90 days trading horizon US BANK NATIONAL is expected to generate 78.59 times more return on investment than Merck. However, 90331HPL1 is 78.59 times more volatile than Merck Company. It trades about 0.09 of its potential returns per unit of risk. Merck Company is currently generating about 0.0 per unit of risk. If you would invest 9,512 in US BANK NATIONAL on August 24, 2024 and sell it today you would earn a total of 84.00 from holding US BANK NATIONAL or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 63.1% |
| Values | Daily Returns |
US BANK NATIONAL vs. Merck Company
Performance |
| Timeline |
| US BANK NATIONAL |
| Merck Company |
90331HPL1 and Merck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 90331HPL1 and Merck
The main advantage of trading using opposite 90331HPL1 and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 90331HPL1 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.| 90331HPL1 vs. Xponential Fitness | 90331HPL1 vs. LB Foster | 90331HPL1 vs. enVVeno Medical Corp | 90331HPL1 vs. Afya |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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