Correlation Between Mercantile Investment and NB Private
Can any of the company-specific risk be diversified away by investing in both Mercantile Investment and NB Private 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 NB Private 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 NB Private Equity, you can compare the effects of market volatilities on Mercantile Investment and NB Private 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 NB Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercantile Investment and NB Private.
Diversification Opportunities for Mercantile Investment and NB Private
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mercantile and NBPE is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding The Mercantile Investment and NB Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NB Private Equity 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 NB Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NB Private Equity has no effect on the direction of Mercantile Investment i.e., Mercantile Investment and NB Private go up and down completely randomly.
Pair Corralation between Mercantile Investment and NB Private
Assuming the 90 days trading horizon The Mercantile Investment is expected to generate 0.72 times more return on investment than NB Private. However, The Mercantile Investment is 1.39 times less risky than NB Private. It trades about 0.11 of its potential returns per unit of risk. NB Private Equity is currently generating about 0.04 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Mercantile Investment vs. NB Private Equity
Performance |
| Timeline |
| The Mercantile Investment |
| NB Private Equity |
Mercantile Investment and NB Private Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercantile Investment and NB Private
The main advantage of trading using opposite Mercantile Investment and NB Private positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercantile Investment position performs unexpectedly, NB Private 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 NB Private will offset losses from the drop in NB Private'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 |
| NB Private vs. GoldMining | NB Private vs. Beowulf Mining | NB Private vs. Endeavour Mining Corp | NB Private vs. Griffin Mining |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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