Correlation Between Press Metal and Mercury Industries
Can any of the company-specific risk be diversified away by investing in both Press Metal 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 Press Metal and Mercury Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Press Metal Bhd and Mercury Industries Bhd, you can compare the effects of market volatilities on Press Metal 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 Press Metal with a short position of Mercury Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Press Metal and Mercury Industries.
Diversification Opportunities for Press Metal and Mercury Industries
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Press and Mercury is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Press Metal 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 Press Metal 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 Press Metal 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 Press Metal i.e., Press Metal and Mercury Industries go up and down completely randomly.
Pair Corralation between Press Metal and Mercury Industries
Assuming the 90 days trading horizon Press Metal Bhd is expected to under-perform the Mercury Industries. But the stock apears to be less risky and, when comparing its historical volatility, Press Metal Bhd is 1.17 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 -0.02 of returns per unit of risk over similar time horizon. If you would invest 99.00 in Mercury Industries Bhd on August 29, 2024 and sell it today you would lose (4.00) from holding Mercury Industries Bhd or give up 4.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Press Metal Bhd vs. Mercury Industries Bhd
Performance |
| Timeline |
| Press Metal Bhd |
| Mercury Industries Bhd |
Press Metal and Mercury Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Press Metal and Mercury Industries
The main advantage of trading using opposite Press Metal and Mercury Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Press Metal 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.| Press Metal vs. Sunzen Biotech Bhd | Press Metal vs. Shangri La Hotels | Press Metal vs. Magni Tech Industries | Press Metal vs. Duopharma Biotech Bhd |
| Mercury Industries vs. Eversafe Rubber Bhd | Mercury Industries vs. Star Media Group | Mercury Industries vs. SSF Home Group | Mercury Industries vs. BP Plastics Holding |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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