Correlation Between Mercury Industries and Shangri La
Can any of the company-specific risk be diversified away by investing in both Mercury Industries and Shangri La 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 Shangri La 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 Shangri La Hotels, you can compare the effects of market volatilities on Mercury Industries and Shangri La 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 Shangri La. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercury Industries and Shangri La.
Diversification Opportunities for Mercury Industries and Shangri La
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mercury and Shangri is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Mercury Industries Bhd and Shangri La Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shangri La Hotels 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 Shangri La. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shangri La Hotels has no effect on the direction of Mercury Industries i.e., Mercury Industries and Shangri La go up and down completely randomly.
Pair Corralation between Mercury Industries and Shangri La
Assuming the 90 days trading horizon Mercury Industries Bhd is expected to generate 1.77 times more return on investment than Shangri La. However, Mercury Industries is 1.77 times more volatile than Shangri La Hotels. It trades about 0.0 of its potential returns per unit of risk. Shangri La Hotels is currently generating about -0.02 per unit of risk. If you would invest 112.00 in Mercury Industries Bhd on September 2, 2024 and sell it today you would lose (18.00) from holding Mercury Industries Bhd or give up 16.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercury Industries Bhd vs. Shangri La Hotels
Performance |
| Timeline |
| Mercury Industries Bhd |
| Shangri La Hotels |
Mercury Industries and Shangri La Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercury Industries and Shangri La
The main advantage of trading using opposite Mercury Industries and Shangri La positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercury Industries position performs unexpectedly, Shangri La 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 Shangri La will offset losses from the drop in Shangri La's long position.| Mercury Industries vs. CB Industrial Product | Mercury Industries vs. Melewar Industrial Group | Mercury Industries vs. Choo Bee Metal | Mercury Industries vs. Nova Wellness Group |
| Shangri La vs. Digistar Bhd | Shangri La vs. Minetech Resources Bhd | Shangri La vs. Swift Haulage Bhd | Shangri La vs. Bina Darulaman 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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