Correlation Between Merrill Lynch and United States
Can any of the company-specific risk be diversified away by investing in both Merrill Lynch and United States 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 Merrill Lynch and United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merrill Lynch and United States 12, you can compare the effects of market volatilities on Merrill Lynch and United States 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 Merrill Lynch with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merrill Lynch and United States.
Diversification Opportunities for Merrill Lynch and United States
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merrill and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Merrill Lynch and United States 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States 12 and Merrill Lynch 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 Merrill Lynch are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States 12 has no effect on the direction of Merrill Lynch i.e., Merrill Lynch and United States go up and down completely randomly.
Pair Corralation between Merrill Lynch and United States
If you would invest 4,173 in United States 12 on January 19, 2024 and sell it today you would lose (139.00) from holding United States 12 or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Merrill Lynch vs. United States 12
Performance |
| Timeline |
| Merrill Lynch |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| United States 12 |
Merrill Lynch and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merrill Lynch and United States
The main advantage of trading using opposite Merrill Lynch and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merrill Lynch position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Merrill Lynch vs. Vanguard Total Stock | Merrill Lynch vs. SPDR SP 500 | Merrill Lynch vs. iShares Core SP | Merrill Lynch vs. Vanguard Total Bond |
| United States vs. Invesco DB Oil | United States vs. United States Gasoline | United States vs. United States Brent | United States vs. United States 12 |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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