Correlation Between Mercer International and Magnera Corp
Can any of the company-specific risk be diversified away by investing in both Mercer International and Magnera Corp 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 Mercer International and Magnera Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercer International and Magnera Corp placeholder, you can compare the effects of market volatilities on Mercer International and Magnera Corp 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 Mercer International with a short position of Magnera Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercer International and Magnera Corp.
Diversification Opportunities for Mercer International and Magnera Corp
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mercer and Magnera is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Mercer International and Magnera Corp placeholder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnera Corp placeholder and Mercer International 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 Mercer International are associated (or correlated) with Magnera Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnera Corp placeholder has no effect on the direction of Mercer International i.e., Mercer International and Magnera Corp go up and down completely randomly.
Pair Corralation between Mercer International and Magnera Corp
Given the investment horizon of 90 days Mercer International is expected to generate 1.35 times more return on investment than Magnera Corp. However, Mercer International is 1.35 times more volatile than Magnera Corp placeholder. It trades about 0.09 of its potential returns per unit of risk. Magnera Corp placeholder is currently generating about 0.05 per unit of risk. If you would invest 621.00 in Mercer International on October 21, 2024 and sell it today you would earn a total of 24.00 from holding Mercer International or generate 3.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercer International vs. Magnera Corp placeholder
Performance |
| Timeline |
| Mercer International |
| Magnera Corp placeholder |
Mercer International and Magnera Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercer International and Magnera Corp
The main advantage of trading using opposite Mercer International and Magnera Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercer International position performs unexpectedly, Magnera Corp 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 Magnera Corp will offset losses from the drop in Magnera Corp's long position.| Mercer International vs. Sylvamo Corp | Mercer International vs. Suzano Papel e | Mercer International vs. UPM Kymmene Oyj | Mercer International vs. Clearwater Paper |
| Magnera Corp vs. Clearwater Paper | Magnera Corp vs. IT Tech Packaging | Magnera Corp vs. Suzano Papel e | Magnera Corp vs. Mercer International |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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