Correlation Between Mercury Industries and Hartalega Holdings
Can any of the company-specific risk be diversified away by investing in both Mercury Industries and Hartalega Holdings 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 Hartalega Holdings 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 Hartalega Holdings Bhd, you can compare the effects of market volatilities on Mercury Industries and Hartalega Holdings 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 Hartalega Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercury Industries and Hartalega Holdings.
Diversification Opportunities for Mercury Industries and Hartalega Holdings
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mercury and Hartalega is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Mercury Industries Bhd and Hartalega Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartalega Holdings 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 Hartalega Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartalega Holdings Bhd has no effect on the direction of Mercury Industries i.e., Mercury Industries and Hartalega Holdings go up and down completely randomly.
Pair Corralation between Mercury Industries and Hartalega Holdings
Assuming the 90 days trading horizon Mercury Industries Bhd is expected to generate 0.69 times more return on investment than Hartalega Holdings. However, Mercury Industries Bhd is 1.45 times less risky than Hartalega Holdings. It trades about 0.23 of its potential returns per unit of risk. Hartalega Holdings Bhd is currently generating about -0.16 per unit of risk. If you would invest 91.00 in Mercury Industries Bhd on October 22, 2024 and sell it today you would earn a total of 6.00 from holding Mercury Industries Bhd or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Mercury Industries Bhd vs. Hartalega Holdings Bhd
Performance |
| Timeline |
| Mercury Industries Bhd |
| Hartalega Holdings Bhd |
Mercury Industries and Hartalega Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercury Industries and Hartalega Holdings
The main advantage of trading using opposite Mercury Industries and Hartalega Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercury Industries position performs unexpectedly, Hartalega Holdings 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 Hartalega Holdings will offset losses from the drop in Hartalega Holdings' long position.| Mercury Industries vs. Steel Hawk Berhad | Mercury Industries vs. CPE Technology Berhad | Mercury Industries vs. ES Ceramics Technology | Mercury Industries vs. Southern Steel Bhd |
| Hartalega Holdings vs. Sports Toto Berhad | Hartalega Holdings vs. Lotte Chemical Titan | Hartalega Holdings vs. K One Technology Bhd | Hartalega Holdings vs. CPE Technology Berhad |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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