Correlation Between Mercator Medical and Gamedust
Can any of the company-specific risk be diversified away by investing in both Mercator Medical and Gamedust 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 Gamedust 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 Gamedust SA, you can compare the effects of market volatilities on Mercator Medical and Gamedust 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 Gamedust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercator Medical and Gamedust.
Diversification Opportunities for Mercator Medical and Gamedust
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mercator and Gamedust is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Mercator Medical SA and Gamedust SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamedust 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 Gamedust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamedust SA has no effect on the direction of Mercator Medical i.e., Mercator Medical and Gamedust go up and down completely randomly.
Pair Corralation between Mercator Medical and Gamedust
Assuming the 90 days trading horizon Mercator Medical SA is expected to generate 0.56 times more return on investment than Gamedust. However, Mercator Medical SA is 1.78 times less risky than Gamedust. It trades about -0.22 of its potential returns per unit of risk. Gamedust SA is currently generating about -0.24 per unit of risk. If you would invest 5,280 in Mercator Medical SA on September 1, 2024 and sell it today you would lose (535.00) from holding Mercator Medical SA or give up 10.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Mercator Medical SA vs. Gamedust SA
Performance |
| Timeline |
| Mercator Medical |
| Gamedust SA |
Mercator Medical and Gamedust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercator Medical and Gamedust
The main advantage of trading using opposite Mercator Medical and Gamedust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercator Medical position performs unexpectedly, Gamedust 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 Gamedust will offset losses from the drop in Gamedust's long position.| Mercator Medical vs. Asseco Business Solutions | Mercator Medical vs. Detalion Games SA | Mercator Medical vs. Asseco South Eastern | Mercator Medical vs. CFI Holding 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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