Correlation Between MERCK Kommanditgesells and Dakshidin

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

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

Diversification Opportunities for MERCK Kommanditgesells and Dakshidin

0.17

Correlation Coefficient

MERCK Kommanditgesells  Dakshidin

Average diversification

The 3 months correlation between MERCK and Dakshidin is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding MERCK Kommanditgesellschaft au and Dakshidin Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dakshidin and MERCK Kommanditgesells 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 MERCK Kommanditgesellschaft auf are associated (or correlated) with Dakshidin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dakshidin has no effect on the direction of MERCK Kommanditgesells i.e., MERCK Kommanditgesells and Dakshidin go up and down completely randomly.

Pair Corralation between MERCK Kommanditgesells and Dakshidin

Assuming the 90 days horizon MERCK Kommanditgesellschaft auf is expected to generate 0.31 times more return on investment than Dakshidin. However, MERCK Kommanditgesellschaft auf is 3.24 times less risky than Dakshidin. It trades about -0.01 of its potential returns per unit of risk. Dakshidin Corporation is currently generating about -0.04 per unit of risk. If you would invest  14,414  in MERCK Kommanditgesellschaft auf on December 29, 2024 and sell it today you would lose (609.00) from holding MERCK Kommanditgesellschaft auf or give up 4.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MERCK Kommanditgesellschaft au  vs.  Dakshidin Corp.

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.

Dakshidin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dakshidin Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with MERCK Kommanditgesells and Dakshidin

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

The idea behind MERCK Kommanditgesellschaft auf and Dakshidin Corporation 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 Valuation module to check real value of public entities based on technical and fundamental data.