Correlation Between Wei Chuan and Mercuries Life
Can any of the company-specific risk be diversified away by investing in both Wei Chuan and Mercuries Life 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 Wei Chuan and Mercuries Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wei Chuan Foods and Mercuries Life Insurance, you can compare the effects of market volatilities on Wei Chuan and Mercuries Life 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 Wei Chuan with a short position of Mercuries Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wei Chuan and Mercuries Life.
Diversification Opportunities for Wei Chuan and Mercuries Life
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wei and Mercuries is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Wei Chuan Foods and Mercuries Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercuries Life Insurance and Wei Chuan 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 Wei Chuan Foods are associated (or correlated) with Mercuries Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercuries Life Insurance has no effect on the direction of Wei Chuan i.e., Wei Chuan and Mercuries Life go up and down completely randomly.
Pair Corralation between Wei Chuan and Mercuries Life
Assuming the 90 days trading horizon Wei Chuan is expected to generate 532.46 times less return on investment than Mercuries Life. But when comparing it to its historical volatility, Wei Chuan Foods is 2.69 times less risky than Mercuries Life. It trades about 0.0 of its potential returns per unit of risk. Mercuries Life Insurance is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 652.00 in Mercuries Life Insurance on November 28, 2024 and sell it today you would earn a total of 80.00 from holding Mercuries Life Insurance or generate 12.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wei Chuan Foods vs. Mercuries Life Insurance
Performance |
| Timeline |
| Wei Chuan Foods |
| Mercuries Life Insurance |
Wei Chuan and Mercuries Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wei Chuan and Mercuries Life
The main advantage of trading using opposite Wei Chuan and Mercuries Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wei Chuan position performs unexpectedly, Mercuries Life 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 Mercuries Life will offset losses from the drop in Mercuries Life's long position.| Wei Chuan vs. Uni President Enterprises Corp | Wei Chuan vs. Taisun Enterprise Co | Wei Chuan vs. AGV Products Corp | Wei Chuan vs. Great Wall Enterprise |
| Mercuries Life vs. CSBC Corp Taiwan | Mercuries Life vs. Hung Sheng Construction | Mercuries Life vs. Ton Yi Industrial | Mercuries Life vs. De Licacy Industrial |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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