Correlation Between Stonex and Mercurity Fintech
Can any of the company-specific risk be diversified away by investing in both Stonex and Mercurity Fintech 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 Stonex and Mercurity Fintech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stonex Group and Mercurity Fintech Holding, you can compare the effects of market volatilities on Stonex and Mercurity Fintech 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 Stonex with a short position of Mercurity Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stonex and Mercurity Fintech.
Diversification Opportunities for Stonex and Mercurity Fintech
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stonex and Mercurity is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Stonex Group and Mercurity Fintech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercurity Fintech Holding and Stonex 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 Stonex Group are associated (or correlated) with Mercurity Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercurity Fintech Holding has no effect on the direction of Stonex i.e., Stonex and Mercurity Fintech go up and down completely randomly.
Pair Corralation between Stonex and Mercurity Fintech
Given the investment horizon of 90 days Stonex is expected to generate 5.42 times less return on investment than Mercurity Fintech. But when comparing it to its historical volatility, Stonex Group is 6.43 times less risky than Mercurity Fintech. It trades about 0.13 of its potential returns per unit of risk. Mercurity Fintech Holding is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 93.00 in Mercurity Fintech Holding on August 26, 2024 and sell it today you would earn a total of 406.00 from holding Mercurity Fintech Holding or generate 436.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stonex Group vs. Mercurity Fintech Holding
Performance |
| Timeline |
| Stonex Group |
| Mercurity Fintech Holding |
Stonex and Mercurity Fintech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stonex and Mercurity Fintech
The main advantage of trading using opposite Stonex and Mercurity Fintech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stonex position performs unexpectedly, Mercurity Fintech 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 Mercurity Fintech will offset losses from the drop in Mercurity Fintech's long position.| Stonex vs. PJT Partners | Stonex vs. Houlihan Lokey | Stonex vs. Stifel Financial | Stonex vs. Evercore Partners |
| Mercurity Fintech vs. Scully Royalty | Mercurity Fintech vs. Donnelley Financial Solutions | Mercurity Fintech vs. Heritage Global | Mercurity Fintech vs. Oppenheimer Holdings |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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