Correlation Between Mercuries Life and Air Asia
Can any of the company-specific risk be diversified away by investing in both Mercuries Life and Air Asia 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 Air Asia 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 Air Asia Co, you can compare the effects of market volatilities on Mercuries Life and Air Asia 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 Air Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercuries Life and Air Asia.
Diversification Opportunities for Mercuries Life and Air Asia
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mercuries and Air is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mercuries Life Insurance and Air Asia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Asia 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 Air Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Asia has no effect on the direction of Mercuries Life i.e., Mercuries Life and Air Asia go up and down completely randomly.
Pair Corralation between Mercuries Life and Air Asia
Assuming the 90 days trading horizon Mercuries Life Insurance is expected to generate 0.88 times more return on investment than Air Asia. However, Mercuries Life Insurance is 1.13 times less risky than Air Asia. It trades about 0.02 of its potential returns per unit of risk. Air Asia Co is currently generating about -0.04 per unit of risk. If you would invest 588.00 in Mercuries Life Insurance on October 12, 2024 and sell it today you would earn a total of 34.00 from holding Mercuries Life Insurance or generate 5.78% 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. Air Asia Co
Performance |
| Timeline |
| Mercuries Life Insurance |
| Air Asia |
Mercuries Life and Air Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercuries Life and Air Asia
The main advantage of trading using opposite Mercuries Life and Air Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercuries Life position performs unexpectedly, Air Asia 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 Air Asia will offset losses from the drop in Air Asia's long position.| Mercuries Life vs. CSBC Corp Taiwan | Mercuries Life vs. Hung Sheng Construction | Mercuries Life vs. Ton Yi Industrial | Mercuries Life vs. De Licacy Industrial |
| Air Asia vs. Oceanic Beverages Co | Air Asia vs. Mercuries Life Insurance | Air Asia vs. Dadi Early Childhood Education | Air Asia vs. Union Insurance 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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