Correlation Between Mercator Medical and Skyline Investment
Can any of the company-specific risk be diversified away by investing in both Mercator Medical and Skyline Investment 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 Skyline Investment 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 Skyline Investment SA, you can compare the effects of market volatilities on Mercator Medical and Skyline Investment 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 Skyline Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercator Medical and Skyline Investment.
Diversification Opportunities for Mercator Medical and Skyline Investment
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mercator and Skyline is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Mercator Medical SA and Skyline Investment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skyline Investment 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 Skyline Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skyline Investment has no effect on the direction of Mercator Medical i.e., Mercator Medical and Skyline Investment go up and down completely randomly.
Pair Corralation between Mercator Medical and Skyline Investment
Assuming the 90 days trading horizon Mercator Medical SA is expected to under-perform the Skyline Investment. But the stock apears to be less risky and, when comparing its historical volatility, Mercator Medical SA is 1.32 times less risky than Skyline Investment. The stock trades about -0.03 of its potential returns per unit of risk. The Skyline Investment SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 155.00 in Skyline Investment SA on September 14, 2024 and sell it today you would earn a total of 10.00 from holding Skyline Investment SA or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercator Medical SA vs. Skyline Investment SA
Performance |
| Timeline |
| Mercator Medical |
| Skyline Investment |
Mercator Medical and Skyline Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercator Medical and Skyline Investment
The main advantage of trading using opposite Mercator Medical and Skyline Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercator Medical position performs unexpectedly, Skyline Investment 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 Skyline Investment will offset losses from the drop in Skyline Investment'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 |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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