Correlation Between Mercuries Data and Chinese Gamer
Can any of the company-specific risk be diversified away by investing in both Mercuries Data and Chinese Gamer 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 Mercuries Data and Chinese Gamer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercuries Data Systems and Chinese Gamer International, you can compare the effects of market volatilities on Mercuries Data and Chinese Gamer 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 Mercuries Data with a short position of Chinese Gamer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercuries Data and Chinese Gamer.
Diversification Opportunities for Mercuries Data and Chinese Gamer
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mercuries and Chinese is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Mercuries Data Systems and Chinese Gamer International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinese Gamer Intern and Mercuries Data 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 Mercuries Data Systems are associated (or correlated) with Chinese Gamer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinese Gamer Intern has no effect on the direction of Mercuries Data i.e., Mercuries Data and Chinese Gamer go up and down completely randomly.
Pair Corralation between Mercuries Data and Chinese Gamer
Assuming the 90 days trading horizon Mercuries Data Systems is expected to under-perform the Chinese Gamer. In addition to that, Mercuries Data is 1.26 times more volatile than Chinese Gamer International. It trades about -0.13 of its total potential returns per unit of risk. Chinese Gamer International is currently generating about -0.15 per unit of volatility. If you would invest 4,625 in Chinese Gamer International on August 31, 2024 and sell it today you would lose (190.00) from holding Chinese Gamer International or give up 4.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercuries Data Systems vs. Chinese Gamer International
Performance |
| Timeline |
| Mercuries Data Systems |
| Chinese Gamer Intern |
Mercuries Data and Chinese Gamer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercuries Data and Chinese Gamer
The main advantage of trading using opposite Mercuries Data and Chinese Gamer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercuries Data position performs unexpectedly, Chinese Gamer 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 Chinese Gamer will offset losses from the drop in Chinese Gamer's long position.| Mercuries Data vs. United Microelectronics | Mercuries Data vs. Winbond Electronics Corp | Mercuries Data vs. Macronix International Co |
| Chinese Gamer vs. Grand Pacific Petrochemical | Chinese Gamer vs. Silicon Power Computer | Chinese Gamer vs. Evermore Chemical Industry | Chinese Gamer vs. Chung Hwa Food |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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