Correlation Between Merck and Viscogliosi Brothers

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

By analyzing existing cross correlation between Merck Company and Viscogliosi Brothers Acquisition, you can compare the effects of market volatilities on Merck and Viscogliosi Brothers 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 with a short position of Viscogliosi Brothers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Viscogliosi Brothers.

Diversification Opportunities for Merck and Viscogliosi Brothers

-0.5

Correlation Coefficient

Merck  Viscogliosi Brothers

Very good diversification

The 3 months correlation between Merck and Viscogliosi is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Viscogliosi Brothers Acquisiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viscogliosi Brothers and Merck 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 Company are associated (or correlated) with Viscogliosi Brothers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viscogliosi Brothers has no effect on the direction of Merck i.e., Merck and Viscogliosi Brothers go up and down completely randomly.

Pair Corralation between Merck and Viscogliosi Brothers

If you would invest  1,047  in Viscogliosi Brothers Acquisition on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Viscogliosi Brothers Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Merck Company  vs.  Viscogliosi Brothers Acquisiti

Merck Company

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Merck Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Viscogliosi Brothers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viscogliosi Brothers Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Viscogliosi Brothers is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Merck and Viscogliosi Brothers

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

The idea behind Merck Company and Viscogliosi Brothers Acquisition 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.