Correlation Between Mercantile Investment and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Mercantile Investment and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on Mercantile Investment and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercantile Investment and Samsung Electronics.
Diversification Opportunities for Mercantile Investment and Samsung Electronics
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mercantile and Samsung is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding The Mercantile Investment and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Mercantile Investment i.e., Mercantile Investment and Samsung Electronics go up and down completely randomly.
Pair Corralation between Mercantile Investment and Samsung Electronics
Assuming the 90 days trading horizon The Mercantile Investment is expected to generate 0.48 times more return on investment than Samsung Electronics. However, The Mercantile Investment is 2.09 times less risky than Samsung Electronics. It trades about -0.04 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.17 per unit of risk. If you would invest 24,497 in The Mercantile Investment on September 3, 2024 and sell it today you would lose (747.00) from holding The Mercantile Investment or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Mercantile Investment vs. Samsung Electronics Co
Performance |
| Timeline |
| The Mercantile Investment |
| Samsung Electronics |
Mercantile Investment and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercantile Investment and Samsung Electronics
The main advantage of trading using opposite Mercantile Investment and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercantile Investment position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' 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 |
| Samsung Electronics vs. Coeur Mining | Samsung Electronics vs. Zoom Video Communications | Samsung Electronics vs. mobilezone holding AG | Samsung Electronics vs. Thor Mining PLC |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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