Correlation Between BEXIMCO PHARMAGDR and Merck KGaA
Can any of the company-specific risk be diversified away by investing in both BEXIMCO PHARMAGDR and Merck KGaA 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 BEXIMCO PHARMAGDR and Merck KGaA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEXIMCO PHARMAGDR REGS and Merck KGaA, you can compare the effects of market volatilities on BEXIMCO PHARMAGDR and Merck KGaA 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 BEXIMCO PHARMAGDR with a short position of Merck KGaA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEXIMCO PHARMAGDR and Merck KGaA.
Diversification Opportunities for BEXIMCO PHARMAGDR and Merck KGaA
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BEXIMCO and Merck is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding BEXIMCO PHARMAGDR REGS and Merck KGaA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck KGaA and BEXIMCO PHARMAGDR 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 BEXIMCO PHARMAGDR REGS are associated (or correlated) with Merck KGaA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merck KGaA has no effect on the direction of BEXIMCO PHARMAGDR i.e., BEXIMCO PHARMAGDR and Merck KGaA go up and down completely randomly.
Pair Corralation between BEXIMCO PHARMAGDR and Merck KGaA
Assuming the 90 days trading horizon BEXIMCO PHARMAGDR REGS is expected to generate 2.32 times more return on investment than Merck KGaA. However, BEXIMCO PHARMAGDR is 2.32 times more volatile than Merck KGaA. It trades about 0.19 of its potential returns per unit of risk. Merck KGaA is currently generating about 0.09 per unit of risk. If you would invest 42.00 in BEXIMCO PHARMAGDR REGS on October 15, 2024 and sell it today you would earn a total of 3.00 from holding BEXIMCO PHARMAGDR REGS or generate 7.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BEXIMCO PHARMAGDR REGS vs. Merck KGaA
Performance |
Timeline |
BEXIMCO PHARMAGDR REGS |
Merck KGaA |
BEXIMCO PHARMAGDR and Merck KGaA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BEXIMCO PHARMAGDR and Merck KGaA
The main advantage of trading using opposite BEXIMCO PHARMAGDR and Merck KGaA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEXIMCO PHARMAGDR position performs unexpectedly, Merck KGaA 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 KGaA will offset losses from the drop in Merck KGaA's long position.BEXIMCO PHARMAGDR vs. QUEEN S ROAD | BEXIMCO PHARMAGDR vs. Jupiter Fund Management | BEXIMCO PHARMAGDR vs. TITANIUM TRANSPORTGROUP | BEXIMCO PHARMAGDR vs. Broadwind |
Merck KGaA vs. Diamyd Medical AB | Merck KGaA vs. Forsys Metals Corp | Merck KGaA vs. Inspire Medical Systems | Merck KGaA vs. ALERION CLEANPOWER |
Check out your portfolio center.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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