Correlation Between Merck and One Stop

Can any of the company-specific risk be diversified away by investing in both Merck and One Stop 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 One Stop into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Merck Company and One Stop Systems, you can compare the effects of market volatilities on Merck and One Stop 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 One Stop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and One Stop.

Diversification Opportunities for Merck and One Stop

-0.47

Correlation Coefficient

Merck  One Stop

Very good diversification

The 3 months correlation between Merck and One is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and One Stop Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Stop Systems 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 One Stop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Stop Systems has no effect on the direction of Merck i.e., Merck and One Stop go up and down completely randomly.

Pair Corralation between Merck and One Stop

Considering the 90-day investment horizon Merck Company is expected to generate 0.35 times more return on investment than One Stop. However, Merck Company is 2.87 times less risky than One Stop. It trades about 0.1 of its potential returns per unit of risk. One Stop Systems is currently generating about 0.02 per unit of risk. If you would invest  8,340  in Merck Company on August 17, 2025 and sell it today you would earn a total of  952.00  from holding Merck Company or generate 11.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Merck Company  vs.  One Stop Systems

Merck Company

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Merck Company are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Merck may actually be approaching a critical reversion point that can send shares even higher in December 2025.

One Stop Systems

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in One Stop Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, One Stop may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Merck and One Stop

The main advantage of trading using opposite Merck and One Stop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, One Stop 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 One Stop will offset losses from the drop in One Stop's long position.

The idea behind Merck Company and One Stop Systems 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.