Correlation Between Tadmax Resources and Mercury Industries
Can any of the company-specific risk be diversified away by investing in both Tadmax Resources and Mercury Industries 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 Tadmax Resources and Mercury Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tadmax Resources Berhad and Mercury Industries Bhd, you can compare the effects of market volatilities on Tadmax Resources and Mercury Industries 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 Tadmax Resources with a short position of Mercury Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tadmax Resources and Mercury Industries.
Diversification Opportunities for Tadmax Resources and Mercury Industries
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tadmax and Mercury is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Tadmax Resources Berhad and Mercury Industries Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercury Industries Bhd and Tadmax Resources 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 Tadmax Resources Berhad are associated (or correlated) with Mercury Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercury Industries Bhd has no effect on the direction of Tadmax Resources i.e., Tadmax Resources and Mercury Industries go up and down completely randomly.
Pair Corralation between Tadmax Resources and Mercury Industries
Assuming the 90 days trading horizon Tadmax Resources Berhad is expected to generate 1.57 times more return on investment than Mercury Industries. However, Tadmax Resources is 1.57 times more volatile than Mercury Industries Bhd. It trades about 0.05 of its potential returns per unit of risk. Mercury Industries Bhd is currently generating about -0.17 per unit of risk. If you would invest 36.00 in Tadmax Resources Berhad on August 27, 2024 and sell it today you would earn a total of 1.00 from holding Tadmax Resources Berhad or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tadmax Resources Berhad vs. Mercury Industries Bhd
Performance |
| Timeline |
| Tadmax Resources Berhad |
| Mercury Industries Bhd |
Tadmax Resources and Mercury Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tadmax Resources and Mercury Industries
The main advantage of trading using opposite Tadmax Resources and Mercury Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tadmax Resources position performs unexpectedly, Mercury Industries 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 Mercury Industries will offset losses from the drop in Mercury Industries' long position.| Tadmax Resources vs. Petronas Chemicals Group | Tadmax Resources vs. Sports Toto Berhad | Tadmax Resources vs. CB Industrial Product | Tadmax Resources vs. Hong Leong Bank |
| Mercury Industries vs. Senheng New Retail | Mercury Industries vs. Alliance Financial Group | Mercury Industries vs. Kluang Rubber | Mercury Industries vs. Apex Healthcare Bhd |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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