Correlation Between Oxford Technology and Mercantile Investment
Can any of the company-specific risk be diversified away by investing in both Oxford Technology 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 Oxford Technology and Mercantile Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford Technology 2 and The Mercantile Investment, you can compare the effects of market volatilities on Oxford Technology 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 Oxford Technology with a short position of Mercantile Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Technology and Mercantile Investment.
Diversification Opportunities for Oxford Technology and Mercantile Investment
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oxford and Mercantile is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Technology 2 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 Oxford Technology 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 Oxford Technology 2 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 Oxford Technology i.e., Oxford Technology and Mercantile Investment go up and down completely randomly.
Pair Corralation between Oxford Technology and Mercantile Investment
Assuming the 90 days trading horizon Oxford Technology 2 is expected to under-perform the Mercantile Investment. In addition to that, Oxford Technology is 1.69 times more volatile than The Mercantile Investment. It trades about -0.12 of its total potential returns per unit of risk. The Mercantile Investment is currently generating about 0.03 per unit of volatility. If you would invest 19,545 in The Mercantile Investment on September 24, 2024 and sell it today you would earn a total of 3,455 from holding The Mercantile Investment or generate 17.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Oxford Technology 2 vs. The Mercantile Investment
Performance |
| Timeline |
| Oxford Technology |
| The Mercantile Investment |
Oxford Technology and Mercantile Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Technology and Mercantile Investment
The main advantage of trading using opposite Oxford Technology and Mercantile Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Technology 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.| Oxford Technology vs. Ecclesiastical Insurance Office | Oxford Technology vs. Atalaya Mining | Oxford Technology vs. Beowulf Mining | Oxford Technology vs. Invesco Physical Silver |
| Mercantile Investment vs. Ameriprise Financial | Mercantile Investment vs. Regions Financial Corp | Mercantile Investment vs. Gruppo MutuiOnline SpA | Mercantile Investment vs. Diversified Energy |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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