Correlation Between Pool and Mercer
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By analyzing existing cross correlation between Pool Corporation and Mercer International 55, you can compare the effects of market volatilities on Pool and Mercer 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 Pool with a short position of Mercer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pool and Mercer.
Diversification Opportunities for Pool and Mercer
Good diversification
The 3 months correlation between Pool and Mercer is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Pool Corp. and Mercer International 55 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercer International and Pool 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 Pool Corporation are associated (or correlated) with Mercer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercer International has no effect on the direction of Pool i.e., Pool and Mercer go up and down completely randomly.
Pair Corralation between Pool and Mercer
If you would invest 36,184 in Pool Corporation on September 2, 2024 and sell it today you would earn a total of 1,525 from holding Pool Corporation or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Pool Corp. vs. Mercer International 55
Performance |
| Timeline |
| Pool |
| Mercer International |
Pool and Mercer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pool and Mercer
The main advantage of trading using opposite Pool and Mercer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pool position performs unexpectedly, Mercer 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 Mercer will offset losses from the drop in Mercer's long position.The idea behind Pool Corporation and Mercer International 55 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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