Correlation Between Mercator Medical and Amica SA
Can any of the company-specific risk be diversified away by investing in both Mercator Medical and Amica 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 Amica 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 Amica SA, you can compare the effects of market volatilities on Mercator Medical and Amica 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 Amica SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercator Medical and Amica SA.
Diversification Opportunities for Mercator Medical and Amica SA
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mercator and Amica is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mercator Medical SA and Amica SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amica 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 Amica SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amica SA has no effect on the direction of Mercator Medical i.e., Mercator Medical and Amica SA go up and down completely randomly.
Pair Corralation between Mercator Medical and Amica SA
Assuming the 90 days trading horizon Mercator Medical SA is expected to generate 1.32 times more return on investment than Amica SA. However, Mercator Medical is 1.32 times more volatile than Amica SA. It trades about -0.1 of its potential returns per unit of risk. Amica SA is currently generating about -0.15 per unit of risk. If you would invest 5,400 in Mercator Medical SA on September 12, 2024 and sell it today you would lose (290.00) from holding Mercator Medical SA or give up 5.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mercator Medical SA vs. Amica SA
Performance |
| Timeline |
| Mercator Medical |
| Amica SA |
Mercator Medical and Amica SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercator Medical and Amica SA
The main advantage of trading using opposite Mercator Medical and Amica SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercator Medical position performs unexpectedly, Amica 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 Amica SA will offset losses from the drop in Amica SA's long position.| Mercator Medical vs. Echo Investment SA | Mercator Medical vs. Movie Games SA | Mercator Medical vs. SOFTWARE MANSION SPOLKA | Mercator Medical vs. Quantum Software 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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