Correlation Between Merlin Properties and Mercal Inmuebles
Can any of the company-specific risk be diversified away by investing in both Merlin Properties and Mercal Inmuebles 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 Mercal Inmuebles 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 Mercal Inmuebles Socimi, you can compare the effects of market volatilities on Merlin Properties and Mercal Inmuebles 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 Mercal Inmuebles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merlin Properties and Mercal Inmuebles.
Diversification Opportunities for Merlin Properties and Mercal Inmuebles
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merlin and Mercal is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Merlin Properties SOCIMI and Mercal Inmuebles Socimi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercal Inmuebles Socimi 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 Mercal Inmuebles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercal Inmuebles Socimi has no effect on the direction of Merlin Properties i.e., Merlin Properties and Mercal Inmuebles go up and down completely randomly.
Pair Corralation between Merlin Properties and Mercal Inmuebles
Assuming the 90 days trading horizon Merlin Properties SOCIMI is expected to generate 0.67 times more return on investment than Mercal Inmuebles. However, Merlin Properties SOCIMI is 1.5 times less risky than Mercal Inmuebles. It trades about 0.07 of its potential returns per unit of risk. Mercal Inmuebles Socimi is currently generating about 0.02 per unit of risk. If you would invest 751.00 in Merlin Properties SOCIMI on September 12, 2024 and sell it today you would earn a total of 267.00 from holding Merlin Properties SOCIMI or generate 35.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 69.05% |
| Values | Daily Returns |
Merlin Properties SOCIMI vs. Mercal Inmuebles Socimi
Performance |
| Timeline |
| Merlin Properties SOCIMI |
| Mercal Inmuebles Socimi |
Merlin Properties and Mercal Inmuebles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merlin Properties and Mercal Inmuebles
The main advantage of trading using opposite Merlin Properties and Mercal Inmuebles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merlin Properties position performs unexpectedly, Mercal Inmuebles 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 Mercal Inmuebles will offset losses from the drop in Mercal Inmuebles' long position.| Merlin Properties vs. Neinor Homes SLU | Merlin Properties vs. Metrovacesa SA | Merlin Properties vs. Atresmedia Corporacin de |
| Mercal Inmuebles vs. Merlin Properties SOCIMI | Mercal Inmuebles vs. Inmobiliaria Colonial SA | Mercal Inmuebles vs. Cia de Distribucion | Mercal Inmuebles vs. ENCE Energa y |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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