Correlation Between CSBC Corp and Mercuries Life
Can any of the company-specific risk be diversified away by investing in both CSBC Corp 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 CSBC Corp and Mercuries Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSBC Corp Taiwan and Mercuries Life Insurance, you can compare the effects of market volatilities on CSBC Corp 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 CSBC Corp with a short position of Mercuries Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSBC Corp and Mercuries Life.
Diversification Opportunities for CSBC Corp and Mercuries Life
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CSBC and Mercuries is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CSBC Corp Taiwan 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 CSBC 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 CSBC Corp Taiwan 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 CSBC Corp i.e., CSBC Corp and Mercuries Life go up and down completely randomly.
Pair Corralation between CSBC Corp and Mercuries Life
Assuming the 90 days trading horizon CSBC Corp Taiwan is expected to under-perform the Mercuries Life. In addition to that, CSBC Corp is 1.07 times more volatile than Mercuries Life Insurance. It trades about -0.01 of its total potential returns per unit of risk. Mercuries Life Insurance is currently generating about 0.02 per unit of volatility. If you would invest 594.00 in Mercuries Life Insurance on August 30, 2024 and sell it today you would earn a total of 71.00 from holding Mercuries Life Insurance or generate 11.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSBC Corp Taiwan vs. Mercuries Life Insurance
Performance |
| Timeline |
| CSBC Corp Taiwan |
| Mercuries Life Insurance |
CSBC Corp and Mercuries Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSBC Corp and Mercuries Life
The main advantage of trading using opposite CSBC Corp and Mercuries Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSBC Corp 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.| CSBC Corp vs. Sincere Navigation Corp | CSBC Corp vs. Evergreen International Storage | CSBC Corp vs. First Steamship Co | CSBC Corp vs. Mercuries Life Insurance |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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