Correlation Between Vanguard Growth and Merck
Can any of the company-specific risk be diversified away by investing in both Vanguard Growth 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 Vanguard Growth and Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Growth And and Merck Company, you can compare the effects of market volatilities on Vanguard Growth 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 Vanguard Growth with a short position of Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and Merck.
Diversification Opportunities for Vanguard Growth and Merck
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between VANGUARD and Merck is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth And and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company and Vanguard Growth 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 Vanguard Growth And 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 Vanguard Growth i.e., Vanguard Growth and Merck go up and down completely randomly.
Pair Corralation between Vanguard Growth and Merck
Assuming the 90 days horizon Vanguard Growth And is expected to generate 0.86 times more return on investment than Merck. However, Vanguard Growth And is 1.17 times less risky than Merck. It trades about 0.1 of its potential returns per unit of risk. Merck Company is currently generating about -0.08 per unit of risk. If you would invest 9,637 in Vanguard Growth And on March 29, 2025 and sell it today you would earn a total of 1,057 from holding Vanguard Growth And or generate 10.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Growth And vs. Merck Company
Performance |
| Timeline |
| Vanguard Growth And |
| Merck Company |
Vanguard Growth and Merck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Growth and Merck
The main advantage of trading using opposite Vanguard Growth and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth 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.| Vanguard Growth vs. Vanguard Growth Fund | Vanguard Growth vs. Vanguard Equity Income | Vanguard Growth vs. Vanguard Windsor Fund | Vanguard Growth vs. Vanguard Growth And |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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