Correlation Between Mercantile Investment and MOL Hungarian
Can any of the company-specific risk be diversified away by investing in both Mercantile Investment and MOL Hungarian 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 Mercantile Investment and MOL Hungarian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Mercantile Investment and MOL Hungarian Oil, you can compare the effects of market volatilities on Mercantile Investment and MOL Hungarian 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 Mercantile Investment with a short position of MOL Hungarian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercantile Investment and MOL Hungarian.
Diversification Opportunities for Mercantile Investment and MOL Hungarian
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mercantile and MOL is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding The Mercantile Investment and MOL Hungarian Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL Hungarian Oil and Mercantile Investment 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 The Mercantile Investment are associated (or correlated) with MOL Hungarian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOL Hungarian Oil has no effect on the direction of Mercantile Investment i.e., Mercantile Investment and MOL Hungarian go up and down completely randomly.
Pair Corralation between Mercantile Investment and MOL Hungarian
Assuming the 90 days trading horizon The Mercantile Investment is expected to generate 0.25 times more return on investment than MOL Hungarian. However, The Mercantile Investment is 3.93 times less risky than MOL Hungarian. It trades about 0.17 of its potential returns per unit of risk. MOL Hungarian Oil is currently generating about 0.01 per unit of risk. If you would invest 23,450 in The Mercantile Investment on September 13, 2024 and sell it today you would earn a total of 650.00 from holding The Mercantile Investment or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Mercantile Investment vs. MOL Hungarian Oil
Performance |
| Timeline |
| The Mercantile Investment |
| MOL Hungarian Oil |
Mercantile Investment and MOL Hungarian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercantile Investment and MOL Hungarian
The main advantage of trading using opposite Mercantile Investment and MOL Hungarian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercantile Investment position performs unexpectedly, MOL Hungarian 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 MOL Hungarian will offset losses from the drop in MOL Hungarian's long position.| Mercantile Investment vs. United States Steel | Mercantile Investment vs. Iron Mountain | Mercantile Investment vs. Gaztransport et Technigaz | Mercantile Investment vs. Tata Steel Limited |
| MOL Hungarian vs. Samsung Electronics Co | MOL Hungarian vs. Samsung Electronics Co | MOL Hungarian vs. Hyundai Motor | MOL Hungarian vs. Reliance Industries Ltd |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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