This module allows you to analyze existing cross correlation between Merck Company and Ford Motor Company. You can compare the effects of market volatilities on Merck and Ford Motor 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 Ford Motor. See also your portfolio center. Please also check ongoing floating volatility patterns of Merck and Ford Motor.
|Horizon||30 Days Login to change|
Over the last 30 days Merck Company has generated negative risk-adjusted returns adding no value to investors with long positions. 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.
Over the last 30 days Ford Motor Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Ford Motor is not utilizing all of its potentials. The new stock price tumult, may contribute to shorter-term losses for the shareholders.
Merck and Ford Motor Volatility Contrast
Predicted Return Density
Merck Company Inc vs. Ford Motor Company
Considering 30-days investment horizon, Merck Company is expected to generate 0.84 times more return on investment than Ford Motor. However, Merck Company is 1.19 times less risky than Ford Motor. It trades about -0.02 of its potential returns per unit of risk. Ford Motor Company is currently generating about -0.06 per unit of risk. If you would invest 8,460 in Merck Company on August 19, 2019 and sell it today you would lose (209.00) from holding Merck Company or give up 2.47% of portfolio value over 30 days.
Pair Corralation between Merck and Ford Motor
|Time Period||3 Months [change]|
Diversification Opportunities for Merck and Ford Motor
Very poor diversification
Overlapping area represents the amount of risk that can be diversified away by holding Merck Company Inc and Ford Motor Company in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor 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 Ford Motor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ford Motor has no effect on the direction of Merck i.e. Merck and Ford Motor go up and down completely randomly.
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