Correlation Between Ehang Holdings and Mercury Systems
Can any of the company-specific risk be diversified away by investing in both Ehang Holdings and Mercury Systems 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 Ehang Holdings and Mercury Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ehang Holdings and Mercury Systems, you can compare the effects of market volatilities on Ehang Holdings and Mercury Systems 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 Ehang Holdings with a short position of Mercury Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ehang Holdings and Mercury Systems.
Diversification Opportunities for Ehang Holdings and Mercury Systems
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ehang and Mercury is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ehang Holdings and Mercury Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercury Systems and Ehang Holdings 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 Ehang Holdings are associated (or correlated) with Mercury Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercury Systems has no effect on the direction of Ehang Holdings i.e., Ehang Holdings and Mercury Systems go up and down completely randomly.
Pair Corralation between Ehang Holdings and Mercury Systems
Allowing for the 90-day total investment horizon Ehang Holdings is expected to generate 1.83 times more return on investment than Mercury Systems. However, Ehang Holdings is 1.83 times more volatile than Mercury Systems. It trades about 0.03 of its potential returns per unit of risk. Mercury Systems is currently generating about -0.01 per unit of risk. If you would invest 1,352 in Ehang Holdings on August 27, 2024 and sell it today you would earn a total of 173.00 from holding Ehang Holdings or generate 12.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ehang Holdings vs. Mercury Systems
Performance |
| Timeline |
| Ehang Holdings |
| Mercury Systems |
Ehang Holdings and Mercury Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ehang Holdings and Mercury Systems
The main advantage of trading using opposite Ehang Holdings and Mercury Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ehang Holdings position performs unexpectedly, Mercury Systems 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 Systems will offset losses from the drop in Mercury Systems' long position.| Ehang Holdings vs. Redwire Corp | Ehang Holdings vs. Sidus Space | Ehang Holdings vs. Rocket Lab USA | Ehang Holdings vs. Momentus |
| Mercury Systems vs. Curtiss Wright | Mercury Systems vs. Hexcel | Mercury Systems vs. Ducommun Incorporated | Mercury Systems vs. Woodward |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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