Correlation Between Beyond Air and Merck
Can any of the company-specific risk be diversified away by investing in both Beyond Air and Merck 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 Beyond Air and Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Air and Merck Company, you can compare the effects of market volatilities on Beyond Air 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 Beyond Air with a short position of Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Air and Merck.
Diversification Opportunities for Beyond Air and Merck
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Beyond and Merck is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Air and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company and Beyond Air 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 Beyond Air 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 Beyond Air i.e., Beyond Air and Merck go up and down completely randomly.
Pair Corralation between Beyond Air and Merck
Given the investment horizon of 90 days Beyond Air is expected to under-perform the Merck. In addition to that, Beyond Air is 5.54 times more volatile than Merck Company. It trades about -0.03 of its total potential returns per unit of risk. Merck Company is currently generating about 0.16 per unit of volatility. If you would invest 9,579 in Merck Company on September 18, 2024 and sell it today you would earn a total of 430.00 from holding Merck Company or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beyond Air vs. Merck Company
Performance |
| Timeline |
| Beyond Air |
| Merck Company |
Beyond Air and Merck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Air and Merck
The main advantage of trading using opposite Beyond Air and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Air 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.| Beyond Air vs. Lucid Diagnostics | Beyond Air vs. Inari Medical | Beyond Air vs. PAVmed Series Z | Beyond Air vs. Clearpoint Neuro |
| Merck vs. Emergent Biosolutions | Merck vs. Neurocrine Biosciences | Merck vs. Teva Pharma Industries | Merck vs. Haleon plc |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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