Correlation Between DC HEALTHCARE and Mercury Industries
Can any of the company-specific risk be diversified away by investing in both DC HEALTHCARE and Mercury Industries 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 DC HEALTHCARE and Mercury Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DC HEALTHCARE HOLDINGS and Mercury Industries Bhd, you can compare the effects of market volatilities on DC HEALTHCARE and Mercury Industries 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 DC HEALTHCARE with a short position of Mercury Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC HEALTHCARE and Mercury Industries.
Diversification Opportunities for DC HEALTHCARE and Mercury Industries
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between 0283 and Mercury is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding DC HEALTHCARE HOLDINGS and Mercury Industries Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercury Industries Bhd and DC HEALTHCARE 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 DC HEALTHCARE HOLDINGS are associated (or correlated) with Mercury Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercury Industries Bhd has no effect on the direction of DC HEALTHCARE i.e., DC HEALTHCARE and Mercury Industries go up and down completely randomly.
Pair Corralation between DC HEALTHCARE and Mercury Industries
Assuming the 90 days trading horizon DC HEALTHCARE HOLDINGS is expected to generate 1.47 times more return on investment than Mercury Industries. However, DC HEALTHCARE is 1.47 times more volatile than Mercury Industries Bhd. It trades about -0.06 of its potential returns per unit of risk. Mercury Industries Bhd is currently generating about -0.19 per unit of risk. If you would invest 17.00 in DC HEALTHCARE HOLDINGS on August 31, 2024 and sell it today you would lose (1.00) from holding DC HEALTHCARE HOLDINGS or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DC HEALTHCARE HOLDINGS vs. Mercury Industries Bhd
Performance |
| Timeline |
| DC HEALTHCARE HOLDINGS |
| Mercury Industries Bhd |
DC HEALTHCARE and Mercury Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DC HEALTHCARE and Mercury Industries
The main advantage of trading using opposite DC HEALTHCARE and Mercury Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DC HEALTHCARE position performs unexpectedly, Mercury Industries 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 Mercury Industries will offset losses from the drop in Mercury Industries' long position.| DC HEALTHCARE vs. Cengild Medical Berhad | DC HEALTHCARE vs. Kossan Rubber Industries | DC HEALTHCARE vs. YTL Hospitality REIT | DC HEALTHCARE vs. Aeon Credit Service |
| Mercury Industries vs. YX Precious Metals | Mercury Industries vs. Kossan Rubber Industries | Mercury Industries vs. Binasat Communications Bhd | Mercury Industries vs. Aeon Credit Service |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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