Correlation Between PVH Corp and Mercantile Investment
Can any of the company-specific risk be diversified away by investing in both PVH Corp and Mercantile Investment 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 PVH Corp and Mercantile Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PVH Corp and The Mercantile Investment, you can compare the effects of market volatilities on PVH Corp and Mercantile Investment 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 PVH Corp with a short position of Mercantile Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of PVH Corp and Mercantile Investment.
Diversification Opportunities for PVH Corp and Mercantile Investment
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between PVH and Mercantile is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PVH Corp and The Mercantile Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Mercantile Investment and PVH Corp 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 PVH Corp are associated (or correlated) with Mercantile Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Mercantile Investment has no effect on the direction of PVH Corp i.e., PVH Corp and Mercantile Investment go up and down completely randomly.
Pair Corralation between PVH Corp and Mercantile Investment
Assuming the 90 days trading horizon PVH Corp is expected to under-perform the Mercantile Investment. In addition to that, PVH Corp is 2.2 times more volatile than The Mercantile Investment. It trades about -0.01 of its total potential returns per unit of risk. The Mercantile Investment is currently generating about 0.04 per unit of volatility. If you would invest 21,793 in The Mercantile Investment on September 14, 2024 and sell it today you would earn a total of 2,457 from holding The Mercantile Investment or generate 11.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.4% |
| Values | Daily Returns |
PVH Corp vs. The Mercantile Investment
Performance |
| Timeline |
| PVH Corp |
| The Mercantile Investment |
PVH Corp and Mercantile Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PVH Corp and Mercantile Investment
The main advantage of trading using opposite PVH Corp and Mercantile Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PVH Corp position performs unexpectedly, Mercantile Investment 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 Mercantile Investment will offset losses from the drop in Mercantile Investment's long position.| PVH Corp vs. The Mercantile Investment | PVH Corp vs. Diversified Energy | PVH Corp vs. Beazer Homes USA | PVH Corp vs. New Residential Investment |
| Mercantile Investment vs. Catalyst Media Group | Mercantile Investment vs. CATLIN GROUP | Mercantile Investment vs. Tamburi Investment Partners | Mercantile Investment vs. Magnora ASA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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