Correlation Between Merck and Ftac Zeus

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

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

Diversification Opportunities for Merck and Ftac Zeus

0.0

Correlation Coefficient

Merck  Ftac Zeus

Pay attention - limited upside

The 3 months correlation between Merck and Ftac is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Ftac Zeus Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ftac Zeus Acquisition 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 Ftac Zeus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ftac Zeus Acquisition has no effect on the direction of Merck i.e., Merck and Ftac Zeus go up and down completely randomly.

Pair Corralation between Merck and Ftac Zeus

If you would invest (100.00) in Ftac Zeus Acquisition on December 19, 2024 and sell it today you would earn a total of  100.00  from holding Ftac Zeus Acquisition or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Merck Company  vs.  Ftac Zeus Acquisition

Merck Company

Risk-Adjusted Performance

Very Weak

Over the last 90 days Merck Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Merck is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Ftac Zeus Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ftac Zeus Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Ftac Zeus 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 Ftac Zeus

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

The idea behind Merck Company and Ftac Zeus 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.