Correlation Between Mercuries Life and Roo Hsing
Can any of the company-specific risk be diversified away by investing in both Mercuries Life and Roo Hsing 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 Roo Hsing 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 Roo Hsing Co, you can compare the effects of market volatilities on Mercuries Life and Roo Hsing 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 Roo Hsing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercuries Life and Roo Hsing.
Diversification Opportunities for Mercuries Life and Roo Hsing
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mercuries and Roo is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Mercuries Life Insurance and Roo Hsing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roo Hsing 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 Roo Hsing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roo Hsing has no effect on the direction of Mercuries Life i.e., Mercuries Life and Roo Hsing go up and down completely randomly.
Pair Corralation between Mercuries Life and Roo Hsing
Assuming the 90 days trading horizon Mercuries Life Insurance is expected to under-perform the Roo Hsing. In addition to that, Mercuries Life is 1.03 times more volatile than Roo Hsing Co. It trades about -0.12 of its total potential returns per unit of risk. Roo Hsing Co is currently generating about 0.04 per unit of volatility. If you would invest 320.00 in Roo Hsing Co on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Roo Hsing Co or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercuries Life Insurance vs. Roo Hsing Co
Performance |
| Timeline |
| Mercuries Life Insurance |
| Roo Hsing |
Mercuries Life and Roo Hsing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercuries Life and Roo Hsing
The main advantage of trading using opposite Mercuries Life and Roo Hsing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercuries Life position performs unexpectedly, Roo Hsing 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 Roo Hsing will offset losses from the drop in Roo Hsing's long position.| Mercuries Life vs. Central Reinsurance Corp | Mercuries Life vs. Huaku Development Co | Mercuries Life vs. Fubon Financial Holding | Mercuries Life vs. Chailease Holding Co |
| Roo Hsing vs. Chia Yi Steel | Roo Hsing vs. Powertech Industrial Co | Roo Hsing vs. Sunspring Metal Corp | Roo Hsing vs. Mayer Steel Pipe |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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