Correlation Between Investment Friends and Mercator Medical

Can any of the company-specific risk be diversified away by investing in both Investment Friends and Mercator Medical 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 Investment Friends and Mercator Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Investment Friends Capital and Mercator Medical SA, you can compare the effects of market volatilities on Investment Friends and Mercator Medical 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 Investment Friends with a short position of Mercator Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment Friends and Mercator Medical.

Diversification Opportunities for Investment Friends and Mercator Medical

0.0

Correlation Coefficient

Investment Friends  Mercator Medical

Pay attention - limited upside

The 3 months correlation between Investment and Mercator is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Investment Friends Capital and Mercator Medical SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercator Medical and Investment Friends 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 Investment Friends Capital are associated (or correlated) with Mercator Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercator Medical has no effect on the direction of Investment Friends i.e., Investment Friends and Mercator Medical go up and down completely randomly.

Pair Corralation between Investment Friends and Mercator Medical

If you would invest  530.00  in Investment Friends Capital on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Investment Friends Capital or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Investment Friends Capital  vs.  Mercator Medical SA

Investment Friends

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Investment Friends Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Investment Friends is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Mercator Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mercator Medical SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Mercator Medical is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Investment Friends and Mercator Medical

The main advantage of trading using opposite Investment Friends and Mercator Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment Friends position performs unexpectedly, Mercator Medical 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 Mercator Medical will offset losses from the drop in Mercator Medical's long position.

The idea behind Investment Friends Capital and Mercator Medical SA 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.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.