Correlation Between Mercury Industries and Eversafe Rubber
Can any of the company-specific risk be diversified away by investing in both Mercury Industries and Eversafe Rubber 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 Mercury Industries and Eversafe Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercury Industries Bhd and Eversafe Rubber Bhd, you can compare the effects of market volatilities on Mercury Industries and Eversafe Rubber 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 Mercury Industries with a short position of Eversafe Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercury Industries and Eversafe Rubber.
Diversification Opportunities for Mercury Industries and Eversafe Rubber
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mercury and Eversafe is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Mercury Industries Bhd and Eversafe Rubber Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eversafe Rubber Bhd and Mercury Industries 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 Mercury Industries Bhd are associated (or correlated) with Eversafe Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eversafe Rubber Bhd has no effect on the direction of Mercury Industries i.e., Mercury Industries and Eversafe Rubber go up and down completely randomly.
Pair Corralation between Mercury Industries and Eversafe Rubber
Assuming the 90 days trading horizon Mercury Industries Bhd is expected to generate 0.74 times more return on investment than Eversafe Rubber. However, Mercury Industries Bhd is 1.35 times less risky than Eversafe Rubber. It trades about 0.01 of its potential returns per unit of risk. Eversafe Rubber Bhd is currently generating about 0.0 per unit of risk. If you would invest 99.00 in Mercury Industries Bhd on October 27, 2024 and sell it today you would lose (2.00) from holding Mercury Industries Bhd or give up 2.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercury Industries Bhd vs. Eversafe Rubber Bhd
Performance |
| Timeline |
| Mercury Industries Bhd |
| Eversafe Rubber Bhd |
Mercury Industries and Eversafe Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercury Industries and Eversafe Rubber
The main advantage of trading using opposite Mercury Industries and Eversafe Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercury Industries position performs unexpectedly, Eversafe Rubber 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 Eversafe Rubber will offset losses from the drop in Eversafe Rubber's long position.| Mercury Industries vs. Public Bank Bhd | Mercury Industries vs. MI Technovation Bhd | Mercury Industries vs. Supercomnet Technologies Bhd | Mercury Industries vs. Dufu Tech Corp |
| Eversafe Rubber vs. YX Precious Metals | Eversafe Rubber vs. Mycron Steel Bhd | Eversafe Rubber vs. Eonmetall Group Bhd | Eversafe Rubber vs. Computer Forms 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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