Correlation Between Merck and Franklin Exponential

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Merck and Franklin Exponential 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 Franklin Exponential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Franklin Exponential Data, you can compare the effects of market volatilities on Merck and Franklin Exponential 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 Franklin Exponential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Franklin Exponential.

Diversification Opportunities for Merck and Franklin Exponential

-0.61
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Merck and Franklin is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Franklin Exponential Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Exponential Data 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 Franklin Exponential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Exponential Data has no effect on the direction of Merck i.e., Merck and Franklin Exponential go up and down completely randomly.

Pair Corralation between Merck and Franklin Exponential

Considering the 90-day investment horizon Merck Company is expected to generate 0.45 times more return on investment than Franklin Exponential. However, Merck Company is 2.23 times less risky than Franklin Exponential. It trades about 0.14 of its potential returns per unit of risk. Franklin Exponential Data is currently generating about -0.07 per unit of risk. If you would invest  7,139  in Merck Company on August 29, 2022 and sell it today you would earn a total of  3,611  from holding Merck Company or generate 50.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Merck Company  vs.  Franklin Exponential Data

 Performance (%) 
       Timeline  
Merck Company 
Merck Performance
19 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Merck Company are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Merck demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Merck Price Channel

Franklin Exponential Data 
Franklin Performance
0 of 100
Over the last 90 days Franklin Exponential Data has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Franklin Price Channel

Merck and Franklin Exponential Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Merck and Franklin Exponential

The main advantage of trading using opposite Merck and Franklin Exponential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Franklin Exponential 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 Franklin Exponential will offset losses from the drop in Franklin Exponential's long position.
Merck vs. Abbott Laboratories
Merck vs. Alkermes Plc
Merck vs. Bio-Rad Laboratories
Merck vs. Biomarin Pharmaceuticals
The idea behind Merck Company and Franklin Exponential Data 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.
Franklin Exponential vs. Semiconductor Ishares ETF
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

Other Complementary Tools

Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go