Correlation Between Ocean Harvest and Mercantile Investment
Can any of the company-specific risk be diversified away by investing in both Ocean Harvest and Mercantile 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 Ocean Harvest and Mercantile Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocean Harvest Technology and The Mercantile Investment, you can compare the effects of market volatilities on Ocean Harvest and Mercantile 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 Ocean Harvest with a short position of Mercantile Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Harvest and Mercantile Investment.
Diversification Opportunities for Ocean Harvest and Mercantile Investment
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ocean and Mercantile is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Harvest Technology and The Mercantile Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Mercantile Investment and Ocean Harvest 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 Ocean Harvest Technology are associated (or correlated) with Mercantile Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Mercantile Investment has no effect on the direction of Ocean Harvest i.e., Ocean Harvest and Mercantile Investment go up and down completely randomly.
Pair Corralation between Ocean Harvest and Mercantile Investment
Assuming the 90 days trading horizon Ocean Harvest Technology is expected to under-perform the Mercantile Investment. In addition to that, Ocean Harvest is 2.76 times more volatile than The Mercantile Investment. It trades about -0.05 of its total potential returns per unit of risk. The Mercantile Investment is currently generating about 0.05 per unit of volatility. If you would invest 19,140 in The Mercantile Investment on August 31, 2024 and sell it today you would earn a total of 4,510 from holding The Mercantile Investment or generate 23.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocean Harvest Technology vs. The Mercantile Investment
Performance |
| Timeline |
| Ocean Harvest Technology |
| The Mercantile Investment |
Ocean Harvest and Mercantile Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocean Harvest and Mercantile Investment
The main advantage of trading using opposite Ocean Harvest and Mercantile Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Harvest position performs unexpectedly, Mercantile 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 Mercantile Investment will offset losses from the drop in Mercantile Investment's long position.| Ocean Harvest vs. Quadrise Plc | Ocean Harvest vs. ImmuPharma PLC | Ocean Harvest vs. Intuitive Investments Group | Ocean Harvest vs. European Metals Holdings |
| Mercantile Investment vs. Samsung Electronics Co | Mercantile Investment vs. Samsung Electronics Co | Mercantile Investment vs. Hyundai Motor | Mercantile Investment vs. Toyota Motor Corp |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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