Correlation Between MERCK Kommanditgesells and High Sierra

Can any of the company-specific risk be diversified away by investing in both MERCK Kommanditgesells and High Sierra 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 MERCK Kommanditgesells and High Sierra into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MERCK Kommanditgesellschaft auf and High Sierra Technologies, you can compare the effects of market volatilities on MERCK Kommanditgesells and High Sierra 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 Kommanditgesells with a short position of High Sierra. Check out your portfolio center. Please also check ongoing floating volatility patterns of MERCK Kommanditgesells and High Sierra.

Diversification Opportunities for MERCK Kommanditgesells and High Sierra

0.0

Correlation Coefficient

MERCK Kommanditgesells  High Sierra

Pay attention - limited upside

The 3 months correlation between MERCK and High is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MERCK Kommanditgesellschaft au and High Sierra Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Sierra Technologies and MERCK Kommanditgesells 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 Kommanditgesellschaft auf are associated (or correlated) with High Sierra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Sierra Technologies has no effect on the direction of MERCK Kommanditgesells i.e., MERCK Kommanditgesells and High Sierra go up and down completely randomly.

Pair Corralation between MERCK Kommanditgesells and High Sierra

If you would invest  110.00  in High Sierra Technologies on January 26, 2024 and sell it today you would earn a total of  0.00  from holding High Sierra Technologies or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MERCK Kommanditgesellschaft au  vs.  High Sierra Technologies

MERCK Kommanditgesells

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MERCK Kommanditgesellschaft auf has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MERCK Kommanditgesells is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

High Sierra Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days High Sierra Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, High Sierra is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with MERCK Kommanditgesells and High Sierra

The main advantage of trading using opposite MERCK Kommanditgesells and High Sierra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MERCK Kommanditgesells position performs unexpectedly, High Sierra 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 High Sierra will offset losses from the drop in High Sierra's long position.

The idea behind MERCK Kommanditgesellschaft auf and High Sierra Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.