Correlation Between Eonmetall Group and Mercury Industries
Can any of the company-specific risk be diversified away by investing in both Eonmetall Group 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 Eonmetall Group and Mercury Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eonmetall Group Bhd and Mercury Industries Bhd, you can compare the effects of market volatilities on Eonmetall Group 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 Eonmetall Group with a short position of Mercury Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eonmetall Group and Mercury Industries.
Diversification Opportunities for Eonmetall Group and Mercury Industries
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eonmetall and Mercury is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Eonmetall Group Bhd 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 Eonmetall Group 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 Eonmetall Group Bhd 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 Eonmetall Group i.e., Eonmetall Group and Mercury Industries go up and down completely randomly.
Pair Corralation between Eonmetall Group and Mercury Industries
Assuming the 90 days trading horizon Eonmetall Group Bhd is expected to generate 1.21 times more return on investment than Mercury Industries. However, Eonmetall Group is 1.21 times more volatile than Mercury Industries Bhd. It trades about -0.04 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 32.00 in Eonmetall Group Bhd on August 28, 2024 and sell it today you would lose (1.00) from holding Eonmetall Group Bhd or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eonmetall Group Bhd vs. Mercury Industries Bhd
Performance |
| Timeline |
| Eonmetall Group Bhd |
| Mercury Industries Bhd |
Eonmetall Group and Mercury Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eonmetall Group and Mercury Industries
The main advantage of trading using opposite Eonmetall Group and Mercury Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eonmetall Group 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.| Eonmetall Group vs. Leader Steel Holdings | Eonmetall Group vs. Binasat Communications Bhd | Eonmetall Group vs. Berjaya Food Bhd | Eonmetall Group vs. Homeritz Bhd |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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