Correlation Between Mercator Medical and Bank Millennium
Can any of the company-specific risk be diversified away by investing in both Mercator Medical and Bank Millennium 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 Bank Millennium 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 Bank Millennium SA, you can compare the effects of market volatilities on Mercator Medical and Bank Millennium 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 Bank Millennium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercator Medical and Bank Millennium.
Diversification Opportunities for Mercator Medical and Bank Millennium
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mercator and Bank is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mercator Medical SA and Bank Millennium SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Millennium 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 Bank Millennium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Millennium SA has no effect on the direction of Mercator Medical i.e., Mercator Medical and Bank Millennium go up and down completely randomly.
Pair Corralation between Mercator Medical and Bank Millennium
Assuming the 90 days trading horizon Mercator Medical SA is expected to generate 1.15 times more return on investment than Bank Millennium. However, Mercator Medical is 1.15 times more volatile than Bank Millennium SA. It trades about -0.03 of its potential returns per unit of risk. Bank Millennium SA is currently generating about -0.04 per unit of risk. If you would invest 5,350 in Mercator Medical SA on September 14, 2024 and sell it today you would lose (130.00) from holding Mercator Medical SA or give up 2.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercator Medical SA vs. Bank Millennium SA
Performance |
| Timeline |
| Mercator Medical |
| Bank Millennium SA |
Mercator Medical and Bank Millennium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercator Medical and Bank Millennium
The main advantage of trading using opposite Mercator Medical and Bank Millennium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercator Medical position performs unexpectedly, Bank Millennium 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 Bank Millennium will offset losses from the drop in Bank Millennium's long position.| Mercator Medical vs. SOFTWARE MANSION SPOLKA | Mercator Medical vs. Movie Games SA | Mercator Medical vs. Road Studio SA | Mercator Medical vs. New Tech Venture |
| Bank Millennium vs. UniCredit SpA | Bank Millennium vs. Santander Bank Polska | Bank Millennium vs. Bank Polska Kasa | Bank Millennium vs. ING Bank lski |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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