Correlation Analysis Between Microsoft and Merck

This module allows you to analyze existing cross correlation between Microsoft Corporation and Merck Company. You can compare the effects of market volatilities on Microsoft and Merck 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 Microsoft with a short position of Merck. See also your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Merck.
Horizon     30 Days    Login   to change
Symbolsvs
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Comparative Performance

Microsoft  
22

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft Corporation are ranked lower than 2 (%) of all global equities and portfolios over the last 30 days. In spite of comparatively unchanging essential indicators, Microsoft is not utilizing all of its potentials. The continuing stock price uproar, may contribute to short horizon losses for the leadership.
Merck  
33

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Merck Company are ranked lower than 3 (%) of all global equities and portfolios over the last 30 days. Regardless of fairly consistent technical and fundamental indicators, Merck is not utilizing all of its potentials. The existing stock price confusion, may contribute to short-horizon losses for the traders.

Microsoft and Merck Volatility Contrast

 Predicted Return Density 
      Returns 

Microsoft Corp.  vs.  Merck Company Inc

 Performance (%) 
      Timeline 

Pair Volatility

Given the investment horizon of 30 days, Microsoft is expected to generate 1.29 times less return on investment than Merck. In addition to that, Microsoft is 1.12 times more volatile than Merck Company. It trades about 0.04 of its total potential returns per unit of risk. Merck Company is currently generating about 0.06 per unit of volatility. If you would invest  8,159  in Merck Company on September 14, 2019 and sell it today you would earn a total of  319.00  from holding Merck Company or generate 3.91% return on investment over 30 days.

Pair Corralation between Microsoft and Merck

0.02
Time Period3 Months [change]
DirectionPositive 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Microsoft and Merck

Microsoft Corp. diversification synergy

Significant diversification

Overlapping area represents the amount of risk that can be diversified away by holding Microsoft Corp. and Merck Company Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Merck and Microsoft 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 Microsoft Corporation are associated (or correlated) with Merck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merck has no effect on the direction of Microsoft i.e. Microsoft and Merck go up and down completely randomly.
See also your portfolio center. Please also try Aroon Oscillator module to analyze current equity momentum using aroon oscillator and other momentum ratios.


 
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