Correlation Between Merck and Celularity
Can any of the company-specific risk be diversified away by investing in both Merck and Celularity 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 Celularity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Celularity, you can compare the effects of market volatilities on Merck and Celularity 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 Celularity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Celularity.
Diversification Opportunities for Merck and Celularity
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merck and Celularity is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Celularity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celularity 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 Celularity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celularity has no effect on the direction of Merck i.e., Merck and Celularity go up and down completely randomly.
Pair Corralation between Merck and Celularity
Considering the 90-day investment horizon Merck Company is expected to under-perform the Celularity. But the stock apears to be less risky and, when comparing its historical volatility, Merck Company is 7.93 times less risky than Celularity. The stock trades about -0.14 of its potential returns per unit of risk. The Celularity is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 302.00 in Celularity on March 2, 2024 and sell it today you would lose (4.00) from holding Celularity or give up 1.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Merck Company vs. Celularity
Performance |
Timeline |
Merck Company |
Celularity |
Merck and Celularity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Merck and Celularity
The main advantage of trading using opposite Merck and Celularity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Celularity 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 Celularity will offset losses from the drop in Celularity's long position.Merck vs. Teton Westwood Mighty | Merck vs. Innergex Renewable Energy | Merck vs. Hawkins | Merck vs. Ecolab Inc |
Celularity vs. SAB Biotherapeutics | Celularity vs. Quoin Pharmaceuticals Ltd | Celularity vs. Third Harmonic Bio |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Transaction History View history of all your transactions and understand their impact on performance | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |