Correlation Between Mercal Inmuebles and Merlin Properties
Can any of the company-specific risk be diversified away by investing in both Mercal Inmuebles and Merlin Properties 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 Mercal Inmuebles and Merlin Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercal Inmuebles Socimi and Merlin Properties SOCIMI, you can compare the effects of market volatilities on Mercal Inmuebles and Merlin Properties 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 Mercal Inmuebles with a short position of Merlin Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercal Inmuebles and Merlin Properties.
Diversification Opportunities for Mercal Inmuebles and Merlin Properties
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mercal and Merlin is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Mercal Inmuebles Socimi and Merlin Properties SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merlin Properties SOCIMI and Mercal Inmuebles 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 Mercal Inmuebles Socimi are associated (or correlated) with Merlin Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merlin Properties SOCIMI has no effect on the direction of Mercal Inmuebles i.e., Mercal Inmuebles and Merlin Properties go up and down completely randomly.
Pair Corralation between Mercal Inmuebles and Merlin Properties
Assuming the 90 days trading horizon Mercal Inmuebles Socimi is expected to generate 1.5 times more return on investment than Merlin Properties. However, Mercal Inmuebles is 1.5 times more volatile than Merlin Properties SOCIMI. It trades about 0.03 of its potential returns per unit of risk. Merlin Properties SOCIMI is currently generating about 0.03 per unit of risk. If you would invest 4,259 in Mercal Inmuebles Socimi on September 12, 2024 and sell it today you would earn a total of 721.00 from holding Mercal Inmuebles Socimi or generate 16.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 58.33% |
| Values | Daily Returns |
Mercal Inmuebles Socimi vs. Merlin Properties SOCIMI
Performance |
| Timeline |
| Mercal Inmuebles Socimi |
| Merlin Properties SOCIMI |
Mercal Inmuebles and Merlin Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercal Inmuebles and Merlin Properties
The main advantage of trading using opposite Mercal Inmuebles and Merlin Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercal Inmuebles position performs unexpectedly, Merlin Properties 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 Merlin Properties will offset losses from the drop in Merlin Properties' long position.| Mercal Inmuebles vs. Merlin Properties SOCIMI | Mercal Inmuebles vs. Inmobiliaria Colonial SA | Mercal Inmuebles vs. Cia de Distribucion | Mercal Inmuebles vs. ENCE Energa y |
| Merlin Properties vs. Neinor Homes SLU | Merlin Properties vs. Metrovacesa SA | Merlin Properties vs. Atresmedia Corporacin de |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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