Correlation Between Mercator Medical and Wikana SA
Can any of the company-specific risk be diversified away by investing in both Mercator Medical and Wikana SA 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 Wikana SA 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 Wikana SA, you can compare the effects of market volatilities on Mercator Medical and Wikana SA 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 Wikana SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercator Medical and Wikana SA.
Diversification Opportunities for Mercator Medical and Wikana SA
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mercator and Wikana is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mercator Medical SA and Wikana SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wikana 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 Wikana SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wikana SA has no effect on the direction of Mercator Medical i.e., Mercator Medical and Wikana SA go up and down completely randomly.
Pair Corralation between Mercator Medical and Wikana SA
Assuming the 90 days trading horizon Mercator Medical SA is expected to generate 1.17 times more return on investment than Wikana SA. However, Mercator Medical is 1.17 times more volatile than Wikana SA. It trades about 0.02 of its potential returns per unit of risk. Wikana SA is currently generating about -0.05 per unit of risk. If you would invest 4,600 in Mercator Medical SA on September 1, 2024 and sell it today you would earn a total of 145.00 from holding Mercator Medical SA or generate 3.15% 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. Wikana SA
Performance |
| Timeline |
| Mercator Medical |
| Wikana SA |
Mercator Medical and Wikana SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercator Medical and Wikana SA
The main advantage of trading using opposite Mercator Medical and Wikana SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercator Medical position performs unexpectedly, Wikana SA 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 Wikana SA will offset losses from the drop in Wikana SA'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 |
| Wikana SA vs. Intersport Polska SA | Wikana SA vs. Saule Technologies SA | Wikana SA vs. GreenX Metals | Wikana SA vs. Carlson Investments 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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