Correlation Between Aeon Credit and Mercury Industries
Can any of the company-specific risk be diversified away by investing in both Aeon Credit 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 Aeon Credit and Mercury Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeon Credit Service and Mercury Industries Bhd, you can compare the effects of market volatilities on Aeon Credit 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 Aeon Credit with a short position of Mercury Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeon Credit and Mercury Industries.
Diversification Opportunities for Aeon Credit and Mercury Industries
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aeon and Mercury is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Aeon Credit Service 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 Aeon Credit 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 Aeon Credit Service 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 Aeon Credit i.e., Aeon Credit and Mercury Industries go up and down completely randomly.
Pair Corralation between Aeon Credit and Mercury Industries
Assuming the 90 days trading horizon Aeon Credit is expected to generate 1.02 times less return on investment than Mercury Industries. But when comparing it to its historical volatility, Aeon Credit Service is 2.61 times less risky than Mercury Industries. It trades about 0.03 of its potential returns per unit of risk. Mercury Industries Bhd is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 98.00 in Mercury Industries Bhd on September 2, 2024 and sell it today you would lose (4.00) from holding Mercury Industries Bhd or give up 4.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeon Credit Service vs. Mercury Industries Bhd
Performance |
| Timeline |
| Aeon Credit Service |
| Mercury Industries Bhd |
Aeon Credit and Mercury Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeon Credit and Mercury Industries
The main advantage of trading using opposite Aeon Credit and Mercury Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeon Credit 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.| Aeon Credit vs. ES Ceramics Technology | Aeon Credit vs. Computer Forms Bhd | Aeon Credit vs. K One Technology Bhd | Aeon Credit vs. Oriental Food Industries |
| Mercury Industries vs. CB Industrial Product | Mercury Industries vs. Melewar Industrial Group | Mercury Industries vs. Choo Bee Metal | Mercury Industries vs. Nova Wellness Group |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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