Correlation Between Mercantile Investment and Ceres Power
Can any of the company-specific risk be diversified away by investing in both Mercantile Investment and Ceres Power 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 Ceres Power 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 Ceres Power Holdings, you can compare the effects of market volatilities on Mercantile Investment and Ceres Power 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 Ceres Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercantile Investment and Ceres Power.
Diversification Opportunities for Mercantile Investment and Ceres Power
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mercantile and Ceres is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding The Mercantile Investment and Ceres Power Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceres Power Holdings 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 Ceres Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceres Power Holdings has no effect on the direction of Mercantile Investment i.e., Mercantile Investment and Ceres Power go up and down completely randomly.
Pair Corralation between Mercantile Investment and Ceres Power
Assuming the 90 days trading horizon The Mercantile Investment is expected to generate 0.31 times more return on investment than Ceres Power. However, The Mercantile Investment is 3.27 times less risky than Ceres Power. It trades about 0.11 of its potential returns per unit of risk. Ceres Power Holdings is currently generating about -0.08 per unit of risk. If you would invest 23,650 in The Mercantile Investment on September 12, 2024 and sell it today you would earn a total of 450.00 from holding The Mercantile Investment or generate 1.9% 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. Ceres Power Holdings
Performance |
| Timeline |
| The Mercantile Investment |
| Ceres Power Holdings |
Mercantile Investment and Ceres Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercantile Investment and Ceres Power
The main advantage of trading using opposite Mercantile Investment and Ceres Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercantile Investment position performs unexpectedly, Ceres Power 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 Ceres Power will offset losses from the drop in Ceres Power's long position.| Mercantile Investment vs. Flow Traders NV | Mercantile Investment vs. Fonix Mobile plc | Mercantile Investment vs. Dalata Hotel Group | Mercantile Investment vs. Spirent Communications plc |
| Ceres Power vs. Anglesey Mining | Ceres Power vs. Sabre Insurance Group | Ceres Power vs. Endeavour Mining Corp | Ceres Power vs. United Utilities Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |