Correlation Between Mercator Medical and CFI Holding
Can any of the company-specific risk be diversified away by investing in both Mercator Medical and CFI Holding 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 CFI Holding 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 CFI Holding SA, you can compare the effects of market volatilities on Mercator Medical and CFI Holding 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 CFI Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercator Medical and CFI Holding.
Diversification Opportunities for Mercator Medical and CFI Holding
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mercator and CFI is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Mercator Medical SA and CFI Holding SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CFI Holding 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 CFI Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CFI Holding SA has no effect on the direction of Mercator Medical i.e., Mercator Medical and CFI Holding go up and down completely randomly.
Pair Corralation between Mercator Medical and CFI Holding
Assuming the 90 days trading horizon Mercator Medical SA is expected to generate 0.59 times more return on investment than CFI Holding. However, Mercator Medical SA is 1.69 times less risky than CFI Holding. It trades about 0.01 of its potential returns per unit of risk. CFI Holding SA is currently generating about 0.0 per unit of risk. If you would invest 4,750 in Mercator Medical SA on September 3, 2024 and sell it today you would lose (5.00) from holding Mercator Medical SA or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercator Medical SA vs. CFI Holding SA
Performance |
| Timeline |
| Mercator Medical |
| CFI Holding SA |
Mercator Medical and CFI Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercator Medical and CFI Holding
The main advantage of trading using opposite Mercator Medical and CFI Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercator Medical position performs unexpectedly, CFI Holding 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 CFI Holding will offset losses from the drop in CFI Holding's long position.| Mercator Medical vs. Cloud Technologies SA | Mercator Medical vs. Play2Chill SA | Mercator Medical vs. Quantum Software SA | Mercator Medical vs. Live Motion Games |
| CFI Holding vs. Medicalg | CFI Holding vs. Igoria Trade SA | CFI Holding vs. Santander Bank Polska | CFI Holding vs. Movie Games SA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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