Correlation Between Twitter and Merck
Can any of the company-specific risk be diversified away by investing in both Twitter and Merck 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 Twitter and Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Twitter and Merck Company, you can compare the effects of market volatilities on Twitter 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 Twitter with a short position of Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twitter and Merck.
Diversification Opportunities for Twitter and Merck
Pay attention - limited upside
The 3 months correlation between Twitter and Merck is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Twitter and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company and Twitter 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 Twitter 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 Company has no effect on the direction of Twitter i.e., Twitter and Merck go up and down completely randomly.
Pair Corralation between Twitter and Merck
If you would invest 11,814 in Merck Company on January 19, 2024 and sell it today you would earn a total of 723.00 from holding Merck Company or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.59% |
| Values | Daily Returns |
Twitter vs. Merck Company
Performance |
| Timeline |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Merck Company |
Twitter and Merck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Twitter and Merck
The main advantage of trading using opposite Twitter and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twitter position performs unexpectedly, Merck 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 will offset losses from the drop in Merck's long position.| Twitter vs. Harmony Gold Mining | Twitter vs. Balchem | Twitter vs. Chester Mining | Twitter vs. Titan Petrochemicals Group |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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