Correlation Between Choo Bee and Mercury Industries
Can any of the company-specific risk be diversified away by investing in both Choo Bee 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 Choo Bee and Mercury Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choo Bee Metal and Mercury Industries Bhd, you can compare the effects of market volatilities on Choo Bee 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 Choo Bee with a short position of Mercury Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choo Bee and Mercury Industries.
Diversification Opportunities for Choo Bee and Mercury Industries
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Choo and Mercury is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal 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 Choo Bee 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 Choo Bee Metal 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 Choo Bee i.e., Choo Bee and Mercury Industries go up and down completely randomly.
Pair Corralation between Choo Bee and Mercury Industries
Assuming the 90 days trading horizon Choo Bee Metal is expected to under-perform the Mercury Industries. But the stock apears to be less risky and, when comparing its historical volatility, Choo Bee Metal is 1.04 times less risky than Mercury Industries. The stock trades about -0.06 of its potential returns per unit of risk. The Mercury Industries Bhd is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 97.00 in Mercury Industries Bhd on August 28, 2024 and sell it today you would lose (3.00) from holding Mercury Industries Bhd or give up 3.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choo Bee Metal vs. Mercury Industries Bhd
Performance |
| Timeline |
| Choo Bee Metal |
| Mercury Industries Bhd |
Choo Bee and Mercury Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choo Bee and Mercury Industries
The main advantage of trading using opposite Choo Bee and Mercury Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choo Bee 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.The idea behind Choo Bee Metal and Mercury Industries Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |