Correlation Between Merck and IShares Home
Can any of the company-specific risk be diversified away by investing in both Merck and IShares Home 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 IShares Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and iShares Home Construction, you can compare the effects of market volatilities on Merck and IShares Home 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 IShares Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and IShares Home.
Diversification Opportunities for Merck and IShares Home
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Merck and IShares is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and iShares Home Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Home Construction 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 IShares Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Home Construction has no effect on the direction of Merck i.e., Merck and IShares Home go up and down completely randomly.
Pair Corralation between Merck and IShares Home
Considering the 90-day investment horizon Merck Company is expected to generate 1.09 times more return on investment than IShares Home. However, Merck is 1.09 times more volatile than iShares Home Construction. It trades about 0.24 of its potential returns per unit of risk. iShares Home Construction is currently generating about -0.04 per unit of risk. If you would invest 8,567 in Merck Company on October 8, 2025 and sell it today you would earn a total of 2,320 from holding Merck Company or generate 27.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merck Company vs. iShares Home Construction
Performance |
| Timeline |
| Merck Company |
| iShares Home Construction |
Merck and IShares Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and IShares Home
The main advantage of trading using opposite Merck and IShares Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, IShares Home 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 IShares Home will offset losses from the drop in IShares Home's long position.| Merck vs. Journey Medical Corp | Merck vs. InfuSystems Holdings | Merck vs. Aurora Cannabis | Merck vs. Helius Medical Technologies |
| IShares Home vs. iShares Healthcare ETF | IShares Home vs. iShares MSCI United | IShares Home vs. iShares Morningstar Growth | IShares Home vs. WisdomTree Emerging Markets |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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