Correlation Between Mercator Medical and Agroton Public

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

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

Diversification Opportunities for Mercator Medical and Agroton Public

-0.42

Correlation Coefficient

Mercator Medical  Agroton Public

Very good diversification

The 3 months correlation between Mercator and Agroton is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Mercator Medical SA and Agroton Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agroton Public and Mercator Medical 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 Mercator Medical SA are associated (or correlated) with Agroton Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agroton Public has no effect on the direction of Mercator Medical i.e., Mercator Medical and Agroton Public go up and down completely randomly.

Pair Corralation between Mercator Medical and Agroton Public

Assuming the 90 days trading horizon Mercator Medical SA is expected to under-perform the Agroton Public. In addition to that, Mercator Medical is 1.07 times more volatile than Agroton Public. It trades about -0.06 of its total potential returns per unit of risk. Agroton Public is currently generating about 0.09 per unit of volatility. If you would invest  350.00  in Agroton Public on September 5, 2024 and sell it today you would earn a total of  48.00  from holding Agroton Public or generate 13.71% return on investment over 90 days.

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

Mercator Medical SA  vs.  Agroton Public

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 latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Agroton Public

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Agroton Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Agroton Public reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mercator Medical and Agroton Public

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

The idea behind Mercator Medical SA and Agroton Public 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.