Correlation Between Mercator Medical and Bank Polska
Can any of the company-specific risk be diversified away by investing in both Mercator Medical and Bank Polska 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 Polska 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 Polska Kasa, you can compare the effects of market volatilities on Mercator Medical and Bank Polska 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 Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercator Medical and Bank Polska.
Diversification Opportunities for Mercator Medical and Bank Polska
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mercator and Bank is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mercator Medical SA and Bank Polska Kasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Polska Kasa 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 Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Polska Kasa has no effect on the direction of Mercator Medical i.e., Mercator Medical and Bank Polska go up and down completely randomly.
Pair Corralation between Mercator Medical and Bank Polska
Assuming the 90 days trading horizon Mercator Medical is expected to generate 3.73 times less return on investment than Bank Polska. In addition to that, Mercator Medical is 1.21 times more volatile than Bank Polska Kasa. It trades about 0.02 of its total potential returns per unit of risk. Bank Polska Kasa is currently generating about 0.08 per unit of volatility. If you would invest 7,426 in Bank Polska Kasa on September 12, 2024 and sell it today you would earn a total of 7,279 from holding Bank Polska Kasa or generate 98.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercator Medical SA vs. Bank Polska Kasa
Performance |
| Timeline |
| Mercator Medical |
| Bank Polska Kasa |
Mercator Medical and Bank Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercator Medical and Bank Polska
The main advantage of trading using opposite Mercator Medical and Bank Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercator Medical position performs unexpectedly, Bank Polska 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 Polska will offset losses from the drop in Bank Polska'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 |
| Bank Polska vs. Mlk Foods Public | Bank Polska vs. Intersport Polska SA | Bank Polska vs. Marie Brizard Wine | Bank Polska vs. 3R 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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