Correlation Between Cryomass Technologies and MERCK Kommanditgesells

Can any of the company-specific risk be diversified away by investing in both Cryomass Technologies and MERCK Kommanditgesells 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 Cryomass Technologies and MERCK Kommanditgesells into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cryomass Technologies and MERCK Kommanditgesellschaft auf, you can compare the effects of market volatilities on Cryomass Technologies and MERCK Kommanditgesells 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 Cryomass Technologies with a short position of MERCK Kommanditgesells. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cryomass Technologies and MERCK Kommanditgesells.

Diversification Opportunities for Cryomass Technologies and MERCK Kommanditgesells

-0.39

Correlation Coefficient

Cryomass Technologies  MERCK Kommanditgesells

Very good diversification

The 3 months correlation between Cryomass and MERCK is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cryomass Technologies and MERCK Kommanditgesellschaft au in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MERCK Kommanditgesells and Cryomass 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 Cryomass Technologies are associated (or correlated) with MERCK Kommanditgesells. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MERCK Kommanditgesells has no effect on the direction of Cryomass Technologies i.e., Cryomass Technologies and MERCK Kommanditgesells go up and down completely randomly.

Pair Corralation between Cryomass Technologies and MERCK Kommanditgesells

Given the investment horizon of 90 days Cryomass Technologies is expected to generate 3.59 times more return on investment than MERCK Kommanditgesells. However, Cryomass Technologies is 3.59 times more volatile than MERCK Kommanditgesellschaft auf. It trades about 0.15 of its potential returns per unit of risk. MERCK Kommanditgesellschaft auf is currently generating about -0.01 per unit of risk. If you would invest  1.73  in Cryomass Technologies on December 28, 2024 and sell it today you would earn a total of  1.43  from holding Cryomass Technologies or generate 82.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Cryomass Technologies  vs.  MERCK Kommanditgesellschaft au

Cryomass Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cryomass Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Cryomass Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

MERCK Kommanditgesells

Risk-Adjusted Performance

Very Weak

Over the last 90 days MERCK Kommanditgesellschaft auf has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MERCK Kommanditgesells is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cryomass Technologies and MERCK Kommanditgesells

The main advantage of trading using opposite Cryomass Technologies and MERCK Kommanditgesells positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cryomass Technologies position performs unexpectedly, MERCK Kommanditgesells 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 Kommanditgesells will offset losses from the drop in MERCK Kommanditgesells' long position.

The idea behind Cryomass Technologies and MERCK Kommanditgesellschaft auf pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.