Correlation Between Ivy Science and Merck
Can any of the company-specific risk be diversified away by investing in both Ivy Science 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 Ivy Science and Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivy Science And and Merck Company, you can compare the effects of market volatilities on Ivy Science 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 Ivy Science with a short position of Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivy Science and Merck.
Diversification Opportunities for Ivy Science and Merck
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ivy and Merck is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ivy Science And and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company and Ivy Science 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 Ivy Science And 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 Ivy Science i.e., Ivy Science and Merck go up and down completely randomly.
Pair Corralation between Ivy Science and Merck
Assuming the 90 days horizon Ivy Science And is expected to under-perform the Merck. In addition to that, Ivy Science is 1.83 times more volatile than Merck Company. It trades about -0.06 of its total potential returns per unit of risk. Merck Company is currently generating about 0.17 per unit of volatility. If you would invest 12,574 in Merck Company on February 12, 2024 and sell it today you would earn a total of 432.00 from holding Merck Company or generate 3.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ivy Science And vs. Merck Company
Performance |
Timeline |
Ivy Science And |
Merck Company |
Ivy Science and Merck Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ivy Science and Merck
The main advantage of trading using opposite Ivy Science and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivy Science 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.Ivy Science vs. Red Oak Technology | Ivy Science vs. Live Oak Health | Ivy Science vs. HUMANA INC | Ivy Science vs. Aquagold International |
Merck vs. Dell Technologies | Merck vs. MIRA Pharmaceuticals Common | Merck vs. Planet Fitness | Merck vs. VanEck Pharmaceutical ETF |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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