Correlation Between Marex Group and Mercurity Fintech

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

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

Diversification Opportunities for Marex Group and Mercurity Fintech

0.82

Correlation Coefficient

Marex Group  Mercurity Fintech

Very poor diversification

The 3 months correlation between Marex and Mercurity is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Marex Group plc and Mercurity Fintech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercurity Fintech Holding and Marex Group 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 Marex Group plc are associated (or correlated) with Mercurity Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercurity Fintech Holding has no effect on the direction of Marex Group i.e., Marex Group and Mercurity Fintech go up and down completely randomly.

Pair Corralation between Marex Group and Mercurity Fintech

Considering the 90-day investment horizon Marex Group is expected to generate 10.7 times less return on investment than Mercurity Fintech. But when comparing it to its historical volatility, Marex Group plc is 9.59 times less risky than Mercurity Fintech. It trades about 0.21 of its potential returns per unit of risk. Mercurity Fintech Holding is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  121.00  in Mercurity Fintech Holding on September 12, 2024 and sell it today you would earn a total of  531.00  from holding Mercurity Fintech Holding or generate 438.84% return on investment over 90 days.

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

Marex Group plc  vs.  Mercurity Fintech Holding

Marex Group plc

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Marex Group plc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Marex Group showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Marex Group and Mercurity Fintech

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

The idea behind Marex Group plc and Mercurity Fintech Holding 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.