Correlation Between Merchants National and SM Prime
Can any of the company-specific risk be diversified away by investing in both Merchants National and SM Prime 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 Merchants National and SM Prime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merchants National Properties and SM Prime Holdings, you can compare the effects of market volatilities on Merchants National and SM Prime 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 Merchants National with a short position of SM Prime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merchants National and SM Prime.
Diversification Opportunities for Merchants National and SM Prime
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merchants and SPHXF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Merchants National Properties and SM Prime Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Prime Holdings and Merchants National 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 Merchants National Properties are associated (or correlated) with SM Prime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SM Prime Holdings has no effect on the direction of Merchants National i.e., Merchants National and SM Prime go up and down completely randomly.
Pair Corralation between Merchants National and SM Prime
If you would invest 173,500 in Merchants National Properties on September 1, 2024 and sell it today you would earn a total of 1,500 from holding Merchants National Properties or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merchants National Properties vs. SM Prime Holdings
Performance |
| Timeline |
| Merchants National |
| SM Prime Holdings |
Merchants National and SM Prime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merchants National and SM Prime
The main advantage of trading using opposite Merchants National and SM Prime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merchants National position performs unexpectedly, SM Prime 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 SM Prime will offset losses from the drop in SM Prime's long position.| Merchants National vs. SM Prime Holdings | Merchants National vs. Mitsubishi Estate Co | Merchants National vs. Daito Trust Construction |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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