Correlation Between Mercuries Life and Chinese Maritime
Can any of the company-specific risk be diversified away by investing in both Mercuries Life and Chinese Maritime 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 Life and Chinese Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercuries Life Insurance and Chinese Maritime Transport, you can compare the effects of market volatilities on Mercuries Life and Chinese Maritime 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 Life with a short position of Chinese Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercuries Life and Chinese Maritime.
Diversification Opportunities for Mercuries Life and Chinese Maritime
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mercuries and Chinese is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Mercuries Life Insurance and Chinese Maritime Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinese Maritime Tra and Mercuries Life 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 Life Insurance are associated (or correlated) with Chinese Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinese Maritime Tra has no effect on the direction of Mercuries Life i.e., Mercuries Life and Chinese Maritime go up and down completely randomly.
Pair Corralation between Mercuries Life and Chinese Maritime
Assuming the 90 days trading horizon Mercuries Life Insurance is expected to under-perform the Chinese Maritime. But the stock apears to be less risky and, when comparing its historical volatility, Mercuries Life Insurance is 1.48 times less risky than Chinese Maritime. The stock trades about -0.15 of its potential returns per unit of risk. The Chinese Maritime Transport is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,225 in Chinese Maritime Transport on September 1, 2024 and sell it today you would earn a total of 75.00 from holding Chinese Maritime Transport or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercuries Life Insurance vs. Chinese Maritime Transport
Performance |
| Timeline |
| Mercuries Life Insurance |
| Chinese Maritime Tra |
Mercuries Life and Chinese Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercuries Life and Chinese Maritime
The main advantage of trading using opposite Mercuries Life and Chinese Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercuries Life position performs unexpectedly, Chinese Maritime 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 Maritime will offset losses from the drop in Chinese Maritime's long position.| Mercuries Life vs. Central Reinsurance Corp | Mercuries Life vs. Huaku Development Co | Mercuries Life vs. Fubon Financial Holding | Mercuries Life vs. CTBC Financial Holding |
| Chinese Maritime vs. U Ming Marine Transport | Chinese Maritime vs. Sincere Navigation Corp | Chinese Maritime vs. Taiwan Navigation Co | Chinese Maritime vs. Huaku Development Co |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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