Correlation Between Segall Bryant and Merck

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Can any of the company-specific risk be diversified away by investing in both Segall Bryant 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 Segall Bryant and Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Segall Bryant Hamill and Merck Company, you can compare the effects of market volatilities on Segall Bryant 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 Segall Bryant with a short position of Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Segall Bryant and Merck.

Diversification Opportunities for Segall Bryant and Merck

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Segall and Merck is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SEGALL BRYANT HAMILL and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company and Segall Bryant 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 Segall Bryant Hamill 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 Segall Bryant i.e., Segall Bryant and Merck go up and down completely randomly.

Pair Corralation between Segall Bryant and Merck

If you would invest  8,285  in Merck Company on December 29, 2023 and sell it today you would earn a total of  4,910  from holding Merck Company or generate 59.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

SEGALL BRYANT HAMILL  vs.  Merck Company

 Performance 
       Timeline  
Segall Bryant Hamill 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
OK
Over the last 90 days Segall Bryant Hamill has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Segall Bryant is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Merck Company 

Risk-Adjusted Performance

21 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Merck Company are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite sluggish basic indicators, Merck disclosed solid returns over the last few months and may actually be approaching a breakup point.

Segall Bryant and Merck Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Segall Bryant and Merck

The main advantage of trading using opposite Segall Bryant and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Segall Bryant 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.
The idea behind Segall Bryant Hamill and Merck Company 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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.

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