Correlation Between Mercurity Fintech and Heritage Global

Can any of the company-specific risk be diversified away by investing in both Mercurity Fintech and Heritage Global 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 Mercurity Fintech and Heritage Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mercurity Fintech Holding and Heritage Global, you can compare the effects of market volatilities on Mercurity Fintech and Heritage Global 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 Mercurity Fintech with a short position of Heritage Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercurity Fintech and Heritage Global.

Diversification Opportunities for Mercurity Fintech and Heritage Global

0.35

Correlation Coefficient

Mercurity Fintech  Heritage Global

Weak diversification

The 3 months correlation between Mercurity and Heritage is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mercurity Fintech Holding and Heritage Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Global and Mercurity Fintech 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 Mercurity Fintech Holding are associated (or correlated) with Heritage Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage Global has no effect on the direction of Mercurity Fintech i.e., Mercurity Fintech and Heritage Global go up and down completely randomly.

Pair Corralation between Mercurity Fintech and Heritage Global

Considering the 90-day investment horizon Mercurity Fintech Holding is expected to generate 10.27 times more return on investment than Heritage Global. However, Mercurity Fintech is 10.27 times more volatile than Heritage Global. It trades about 0.33 of its potential returns per unit of risk. Heritage Global is currently generating about 0.12 per unit of risk. If you would invest  234.00  in Mercurity Fintech Holding on September 12, 2024 and sell it today you would earn a total of  418.00  from holding Mercurity Fintech Holding or generate 178.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Mercurity Fintech Holding  vs.  Heritage Global

Mercurity Fintech Holding

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mercurity Fintech Holding are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting technical and fundamental indicators, Mercurity Fintech demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Heritage Global

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Heritage Global are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Heritage Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mercurity Fintech and Heritage Global

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

The idea behind Mercurity Fintech Holding and Heritage Global 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.