Correlation Between Galexxy Holdings and MERCK Kommanditgesells

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

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

Diversification Opportunities for Galexxy Holdings and MERCK Kommanditgesells

0.16

Correlation Coefficient

Galexxy Holdings  MERCK Kommanditgesells

Average diversification

The 3 months correlation between Galexxy and MERCK is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Galexxy Holdings and MERCK Kommanditgesellschaft au in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MERCK Kommanditgesells and Galexxy Holdings 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 Galexxy Holdings 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 Galexxy Holdings i.e., Galexxy Holdings and MERCK Kommanditgesells go up and down completely randomly.

Pair Corralation between Galexxy Holdings and MERCK Kommanditgesells

Given the investment horizon of 90 days Galexxy Holdings is expected to generate 10.48 times more return on investment than MERCK Kommanditgesells. However, Galexxy Holdings is 10.48 times more volatile than MERCK Kommanditgesellschaft auf. It trades about 0.1 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  0.59  in Galexxy Holdings on December 29, 2024 and sell it today you would earn a total of  0.36  from holding Galexxy Holdings or generate 61.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Galexxy Holdings  vs.  MERCK Kommanditgesellschaft au

Galexxy Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Galexxy Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Galexxy Holdings showed 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 Galexxy Holdings and MERCK Kommanditgesells

The main advantage of trading using opposite Galexxy Holdings and MERCK Kommanditgesells positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galexxy Holdings 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 Galexxy Holdings 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.