Correlation Between Mercuries Life and Sunmax Biotechnology
Can any of the company-specific risk be diversified away by investing in both Mercuries Life and Sunmax Biotechnology 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 Sunmax Biotechnology 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 Sunmax Biotechnology Co, you can compare the effects of market volatilities on Mercuries Life and Sunmax Biotechnology 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 Sunmax Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercuries Life and Sunmax Biotechnology.
Diversification Opportunities for Mercuries Life and Sunmax Biotechnology
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mercuries and Sunmax is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mercuries Life Insurance and Sunmax Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunmax Biotechnology 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 Sunmax Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunmax Biotechnology has no effect on the direction of Mercuries Life i.e., Mercuries Life and Sunmax Biotechnology go up and down completely randomly.
Pair Corralation between Mercuries Life and Sunmax Biotechnology
Assuming the 90 days trading horizon Mercuries Life Insurance is expected to under-perform the Sunmax Biotechnology. In addition to that, Mercuries Life is 1.27 times more volatile than Sunmax Biotechnology Co. It trades about -0.15 of its total potential returns per unit of risk. Sunmax Biotechnology Co is currently generating about 0.2 per unit of volatility. If you would invest 26,700 in Sunmax Biotechnology Co on September 1, 2024 and sell it today you would earn a total of 1,100 from holding Sunmax Biotechnology Co or generate 4.12% 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. Sunmax Biotechnology Co
Performance |
| Timeline |
| Mercuries Life Insurance |
| Sunmax Biotechnology |
Mercuries Life and Sunmax Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercuries Life and Sunmax Biotechnology
The main advantage of trading using opposite Mercuries Life and Sunmax Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercuries Life position performs unexpectedly, Sunmax Biotechnology 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 Sunmax Biotechnology will offset losses from the drop in Sunmax Biotechnology's long position.| Mercuries Life vs. Central Reinsurance Corp | Mercuries Life vs. Huaku Development Co | Mercuries Life vs. Fubon Financial Holding |
| Sunmax Biotechnology vs. Medigen Vaccine Biologics | Sunmax Biotechnology vs. OBI Pharma | Sunmax Biotechnology vs. TaiMed Biologics | Sunmax Biotechnology vs. Tanvex BioPharma |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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