Correlation Between Mercantile Investment and 4Imprint Group
Can any of the company-specific risk be diversified away by investing in both Mercantile Investment and 4Imprint Group 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 4Imprint Group 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 4Imprint Group Plc, you can compare the effects of market volatilities on Mercantile Investment and 4Imprint Group 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 4Imprint Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercantile Investment and 4Imprint Group.
Diversification Opportunities for Mercantile Investment and 4Imprint Group
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mercantile and 4Imprint is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding The Mercantile Investment and 4Imprint Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4Imprint Group Plc 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 4Imprint Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4Imprint Group Plc has no effect on the direction of Mercantile Investment i.e., Mercantile Investment and 4Imprint Group go up and down completely randomly.
Pair Corralation between Mercantile Investment and 4Imprint Group
Assuming the 90 days trading horizon Mercantile Investment is expected to generate 1.49 times less return on investment than 4Imprint Group. But when comparing it to its historical volatility, The Mercantile Investment is 1.8 times less risky than 4Imprint Group. It trades about 0.05 of its potential returns per unit of risk. 4Imprint Group Plc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 372,127 in 4Imprint Group Plc on September 3, 2024 and sell it today you would earn a total of 132,873 from holding 4Imprint Group Plc or generate 35.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
The Mercantile Investment vs. 4Imprint Group Plc
Performance |
| Timeline |
| The Mercantile Investment |
| 4Imprint Group Plc |
Mercantile Investment and 4Imprint Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercantile Investment and 4Imprint Group
The main advantage of trading using opposite Mercantile Investment and 4Imprint Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercantile Investment position performs unexpectedly, 4Imprint Group 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 4Imprint Group will offset losses from the drop in 4Imprint Group's long position.| Mercantile Investment vs. SupplyMe Capital PLC | Mercantile Investment vs. 88 Energy | Mercantile Investment vs. Vodafone Group PLC | Mercantile Investment vs. Vodafone Group PLC |
| 4Imprint Group vs. Games Workshop Group | 4Imprint Group vs. Arcticzymes Technologies ASA | 4Imprint Group vs. Odyssean Investment Trust | 4Imprint Group vs. The Mercantile Investment |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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