Correlation Between Merck and Bentley SystemsInc
Can any of the company-specific risk be diversified away by investing in both Merck and Bentley SystemsInc 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 and Bentley SystemsInc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Bentley SystemsInc, you can compare the effects of market volatilities on Merck and Bentley SystemsInc 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 Bentley SystemsInc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Bentley SystemsInc.
Diversification Opportunities for Merck and Bentley SystemsInc
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Merck and Bentley is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Bentley SystemsInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bentley SystemsInc 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 Bentley SystemsInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bentley SystemsInc has no effect on the direction of Merck i.e., Merck and Bentley SystemsInc go up and down completely randomly.
Pair Corralation between Merck and Bentley SystemsInc
Considering the 90-day investment horizon Merck is expected to generate 4.64 times less return on investment than Bentley SystemsInc. But when comparing it to its historical volatility, Merck Company is 1.53 times less risky than Bentley SystemsInc. It trades about 0.05 of its potential returns per unit of risk. Bentley SystemsInc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 5,119 in Bentley SystemsInc on January 25, 2024 and sell it today you would earn a total of 323.00 from holding Bentley SystemsInc or generate 6.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Merck Company vs. Bentley SystemsInc
Performance |
Timeline |
Merck Company |
Bentley SystemsInc |
Merck and Bentley SystemsInc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Merck and Bentley SystemsInc
The main advantage of trading using opposite Merck and Bentley SystemsInc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Bentley SystemsInc 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 Bentley SystemsInc will offset losses from the drop in Bentley SystemsInc's long position.Merck vs. Silver Spike Investment | Merck vs. Alkermes Plc | Merck vs. Eagle Pharmaceuticals | Merck vs. Evotec SE ADR |
Bentley SystemsInc vs. C3 Ai Inc | Bentley SystemsInc vs. Shopify | Bentley SystemsInc vs. Snowflake | Bentley SystemsInc vs. ServiceNow |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
Stocks Directory Find actively traded stocks across global markets | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |