Correlation Between C Mer and Israel China
Can any of the company-specific risk be diversified away by investing in both C Mer and Israel China 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 C Mer and Israel China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C Mer Industries and Israel China Biotechnology, you can compare the effects of market volatilities on C Mer and Israel China 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 C Mer with a short position of Israel China. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Mer and Israel China.
Diversification Opportunities for C Mer and Israel China
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CMER and Israel is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding C Mer Industries and Israel China Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel China Biotech and C Mer 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 C Mer Industries are associated (or correlated) with Israel China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel China Biotech has no effect on the direction of C Mer i.e., C Mer and Israel China go up and down completely randomly.
Pair Corralation between C Mer and Israel China
Assuming the 90 days trading horizon C Mer Industries is expected to generate 1.07 times more return on investment than Israel China. However, C Mer is 1.07 times more volatile than Israel China Biotechnology. It trades about 0.25 of its potential returns per unit of risk. Israel China Biotechnology is currently generating about -0.06 per unit of risk. If you would invest 171,600 in C Mer Industries on September 18, 2024 and sell it today you would earn a total of 95,400 from holding C Mer Industries or generate 55.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 97.83% |
Values | Daily Returns |
C Mer Industries vs. Israel China Biotechnology
Performance |
Timeline |
C Mer Industries |
Israel China Biotech |
C Mer and Israel China Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with C Mer and Israel China
The main advantage of trading using opposite C Mer and Israel China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Mer position performs unexpectedly, Israel China 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 Israel China will offset losses from the drop in Israel China's long position.C Mer vs. Israel China Biotechnology | C Mer vs. Blender Financial Technologies | C Mer vs. Abra Information Technologies | C Mer vs. Sure Tech Investments LP |
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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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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