Correlation Between Merck and Logansport Financial

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

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

Diversification Opportunities for Merck and Logansport Financial

0.5

Correlation Coefficient

Merck  Logansport Financial

Very weak diversification

The 3 months correlation between Merck and Logansport is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Logansport Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logansport Financial Corp 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 Logansport Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logansport Financial Corp has no effect on the direction of Merck i.e., Merck and Logansport Financial go up and down completely randomly.

Pair Corralation between Merck and Logansport Financial

Considering the 90-day investment horizon Merck Company is expected to generate 1.41 times more return on investment than Logansport Financial. However, Merck is 1.41 times more volatile than Logansport Financial Corp. It trades about 0.12 of its potential returns per unit of risk. Logansport Financial Corp is currently generating about 0.11 per unit of risk. If you would invest  8,432  in Merck Company on September 11, 2025 and sell it today you would earn a total of  1,330  from holding Merck Company or generate 15.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Merck Company  vs.  Logansport Financial Corp

Merck Company

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Merck Company are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Merck disclosed solid returns over the last few months and may actually be approaching a breakup point.

Logansport Financial Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Logansport Financial Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Logansport Financial may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Pair Trading with Merck and Logansport Financial

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

The idea behind Merck Company and Logansport Financial Corp 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.