Correlation Between Merlin Properties and All Iron
Can any of the company-specific risk be diversified away by investing in both Merlin Properties and All Iron 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 Merlin Properties and All Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merlin Properties SOCIMI and All Iron Re, you can compare the effects of market volatilities on Merlin Properties and All Iron 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 Merlin Properties with a short position of All Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merlin Properties and All Iron.
Diversification Opportunities for Merlin Properties and All Iron
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merlin and All is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Merlin Properties SOCIMI and All Iron Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on All Iron Re and Merlin Properties 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 Merlin Properties SOCIMI are associated (or correlated) with All Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of All Iron Re has no effect on the direction of Merlin Properties i.e., Merlin Properties and All Iron go up and down completely randomly.
Pair Corralation between Merlin Properties and All Iron
Assuming the 90 days trading horizon Merlin Properties SOCIMI is expected to generate 0.8 times more return on investment than All Iron. However, Merlin Properties SOCIMI is 1.24 times less risky than All Iron. It trades about 0.04 of its potential returns per unit of risk. All Iron Re is currently generating about 0.01 per unit of risk. If you would invest 837.00 in Merlin Properties SOCIMI on October 23, 2024 and sell it today you would earn a total of 228.00 from holding Merlin Properties SOCIMI or generate 27.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Merlin Properties SOCIMI vs. All Iron Re
Performance |
| Timeline |
| Merlin Properties SOCIMI |
| All Iron Re |
Merlin Properties and All Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merlin Properties and All Iron
The main advantage of trading using opposite Merlin Properties and All Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merlin Properties position performs unexpectedly, All Iron 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 All Iron will offset losses from the drop in All Iron's long position.| Merlin Properties vs. Elaia Investment Spain | Merlin Properties vs. Squirrel Media SA | Merlin Properties vs. All Iron Re | Merlin Properties vs. Cellnex Telecom SA |
| All Iron vs. Merlin Properties SOCIMI | All Iron vs. GMP Property SOCIMI | All Iron vs. Castellana Properties Socimi | All Iron vs. Elaia Investment Spain |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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