Correlation Between Mercator Medical and HM Inwest
Can any of the company-specific risk be diversified away by investing in both Mercator Medical and HM Inwest 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 HM Inwest 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 HM Inwest SA, you can compare the effects of market volatilities on Mercator Medical and HM Inwest 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 HM Inwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercator Medical and HM Inwest.
Diversification Opportunities for Mercator Medical and HM Inwest
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mercator and HMI is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Mercator Medical SA and HM Inwest SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HM Inwest 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 HM Inwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HM Inwest SA has no effect on the direction of Mercator Medical i.e., Mercator Medical and HM Inwest go up and down completely randomly.
Pair Corralation between Mercator Medical and HM Inwest
Assuming the 90 days trading horizon Mercator Medical SA is expected to under-perform the HM Inwest. In addition to that, Mercator Medical is 7.81 times more volatile than HM Inwest SA. It trades about -0.22 of its total potential returns per unit of risk. HM Inwest SA is currently generating about 0.03 per unit of volatility. If you would invest 4,790 in HM Inwest SA on September 1, 2024 and sell it today you would earn a total of 10.00 from holding HM Inwest SA or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Mercator Medical SA vs. HM Inwest SA
Performance |
| Timeline |
| Mercator Medical |
| HM Inwest SA |
Mercator Medical and HM Inwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercator Medical and HM Inwest
The main advantage of trading using opposite Mercator Medical and HM Inwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercator Medical position performs unexpectedly, HM Inwest 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 HM Inwest will offset losses from the drop in HM Inwest'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 |
| HM Inwest vs. Mercator Medical SA | HM Inwest vs. Gaming Factory SA | HM Inwest vs. Intersport Polska SA | HM Inwest vs. CI 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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