Correlation Between Applied Genetic and Merck
Can any of the company-specific risk be diversified away by investing in both Applied Genetic 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 Applied Genetic and Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Genetic and Merck Company, you can compare the effects of market volatilities on Applied Genetic 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 Applied Genetic with a short position of Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Genetic and Merck.
Diversification Opportunities for Applied Genetic and Merck
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Applied and Merck is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Applied Genetic and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company and Applied Genetic 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 Applied Genetic 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 Applied Genetic i.e., Applied Genetic and Merck go up and down completely randomly.
Pair Corralation between Applied Genetic and Merck
Given the investment horizon of 90 days Applied Genetic is expected to generate 6.68 times more return on investment than Merck. However, Applied Genetic is 6.68 times more volatile than Merck Company. It trades about 0.01 of its potential returns per unit of risk. Merck Company is currently generating about 0.08 per unit of risk. If you would invest 43.00 in Applied Genetic on January 18, 2024 and sell it today you would lose (4.00) from holding Applied Genetic or give up 9.3% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 18.2% |
Values | Daily Returns |
Applied Genetic vs. Merck Company
Performance |
Timeline |
Applied Genetic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck Company |
Applied Genetic and Merck Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Applied Genetic and Merck
The main advantage of trading using opposite Applied Genetic and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Genetic 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.Applied Genetic vs. Planet Fitness | Applied Genetic vs. Natural Alternatives International | Applied Genetic vs. Sonos Inc | Applied Genetic vs. Tootsie Roll Industries |
Merck vs. PetIQ Inc | Merck vs. Emergent Biosolutions | Merck vs. Neurocrine Biosciences | Merck vs. Haleon plc |
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.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Stocks Directory Find actively traded stocks across global markets | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |