Correlation Between Mercator Medical and Medicalg
Can any of the company-specific risk be diversified away by investing in both Mercator Medical and Medicalg 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 Medicalg 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 Medicalg, you can compare the effects of market volatilities on Mercator Medical and Medicalg 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 Medicalg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercator Medical and Medicalg.
Diversification Opportunities for Mercator Medical and Medicalg
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mercator and Medicalg is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Mercator Medical SA and Medicalg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicalg 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 Medicalg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicalg has no effect on the direction of Mercator Medical i.e., Mercator Medical and Medicalg go up and down completely randomly.
Pair Corralation between Mercator Medical and Medicalg
Assuming the 90 days trading horizon Mercator Medical is expected to generate 3.59 times less return on investment than Medicalg. But when comparing it to its historical volatility, Mercator Medical SA is 1.61 times less risky than Medicalg. It trades about 0.02 of its potential returns per unit of risk. Medicalg is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,226 in Medicalg on September 12, 2024 and sell it today you would earn a total of 573.00 from holding Medicalg or generate 46.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercator Medical SA vs. Medicalg
Performance |
| Timeline |
| Mercator Medical |
| Medicalg |
Mercator Medical and Medicalg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercator Medical and Medicalg
The main advantage of trading using opposite Mercator Medical and Medicalg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercator Medical position performs unexpectedly, Medicalg 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 Medicalg will offset losses from the drop in Medicalg'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 |
| Medicalg vs. ING Bank lski | Medicalg vs. Centrum Finansowe Banku | Medicalg vs. Saule Technologies SA | Medicalg vs. Santander Bank Polska |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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