Correlation Between Mercator Medical and Alta SA
Can any of the company-specific risk be diversified away by investing in both Mercator Medical and Alta SA 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 Mercator Medical and Alta SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercator Medical SA and Alta SA, you can compare the effects of market volatilities on Mercator Medical and Alta SA 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 Mercator Medical with a short position of Alta SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercator Medical and Alta SA.
Diversification Opportunities for Mercator Medical and Alta SA
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mercator and Alta is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Mercator Medical SA and Alta SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta SA and Mercator Medical 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 Mercator Medical SA are associated (or correlated) with Alta SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta SA has no effect on the direction of Mercator Medical i.e., Mercator Medical and Alta SA go up and down completely randomly.
Pair Corralation between Mercator Medical and Alta SA
Assuming the 90 days trading horizon Mercator Medical is expected to generate 1.38 times less return on investment than Alta SA. In addition to that, Mercator Medical is 1.4 times more volatile than Alta SA. It trades about 0.08 of its total potential returns per unit of risk. Alta SA is currently generating about 0.16 per unit of volatility. If you would invest 227.00 in Alta SA on November 2, 2024 and sell it today you would earn a total of 17.00 from holding Alta SA or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercator Medical SA vs. Alta SA
Performance |
| Timeline |
| Mercator Medical |
| Alta SA |
Mercator Medical and Alta SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercator Medical and Alta SA
The main advantage of trading using opposite Mercator Medical and Alta SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercator Medical position performs unexpectedly, Alta SA 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 Alta SA will offset losses from the drop in Alta SA's long position.| Mercator Medical vs. Immobile | Mercator Medical vs. mBank SA | Mercator Medical vs. Alior Bank SA | Mercator Medical vs. Drago entertainment SA |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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