Correlation Between Beeks Trading and Mercantile Investment
Can any of the company-specific risk be diversified away by investing in both Beeks Trading 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 Beeks Trading and Mercantile Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beeks Trading and The Mercantile Investment, you can compare the effects of market volatilities on Beeks Trading 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 Beeks Trading with a short position of Mercantile Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beeks Trading and Mercantile Investment.
Diversification Opportunities for Beeks Trading and Mercantile Investment
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Beeks and Mercantile is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Beeks Trading 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 Beeks Trading 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 Beeks Trading 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 Beeks Trading i.e., Beeks Trading and Mercantile Investment go up and down completely randomly.
Pair Corralation between Beeks Trading and Mercantile Investment
Assuming the 90 days trading horizon Beeks Trading is expected to generate 3.07 times more return on investment than Mercantile Investment. However, Beeks Trading is 3.07 times more volatile than The Mercantile Investment. It trades about 0.1 of its potential returns per unit of risk. The Mercantile Investment is currently generating about -0.06 per unit of risk. If you would invest 23,400 in Beeks Trading on September 25, 2024 and sell it today you would earn a total of 4,200 from holding Beeks Trading or generate 17.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Beeks Trading vs. The Mercantile Investment
Performance |
Timeline |
Beeks Trading |
The Mercantile Investment |
Beeks Trading and Mercantile Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beeks Trading and Mercantile Investment
The main advantage of trading using opposite Beeks Trading and Mercantile Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beeks Trading 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.Beeks Trading vs. Catalyst Media Group | Beeks Trading vs. CATLIN GROUP | Beeks Trading vs. Tamburi Investment Partners | Beeks Trading vs. Magnora ASA |
Mercantile Investment vs. Advanced Medical Solutions | Mercantile Investment vs. Norwegian Air Shuttle | Mercantile Investment vs. Systemair AB | Mercantile Investment vs. Amedeo Air Four |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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