Correlation Between Mercuries Life and Union Insurance
Can any of the company-specific risk be diversified away by investing in both Mercuries Life and Union Insurance 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 Mercuries Life and Union Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercuries Life Insurance and Union Insurance Co, you can compare the effects of market volatilities on Mercuries Life and Union Insurance 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 Mercuries Life with a short position of Union Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercuries Life and Union Insurance.
Diversification Opportunities for Mercuries Life and Union Insurance
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mercuries and Union is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Mercuries Life Insurance and Union Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Insurance and Mercuries Life 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 Mercuries Life Insurance are associated (or correlated) with Union Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Insurance has no effect on the direction of Mercuries Life i.e., Mercuries Life and Union Insurance go up and down completely randomly.
Pair Corralation between Mercuries Life and Union Insurance
Assuming the 90 days trading horizon Mercuries Life Insurance is expected to generate 1.32 times more return on investment than Union Insurance. However, Mercuries Life is 1.32 times more volatile than Union Insurance Co. It trades about 0.05 of its potential returns per unit of risk. Union Insurance Co is currently generating about 0.02 per unit of risk. If you would invest 632.00 in Mercuries Life Insurance on December 30, 2024 and sell it today you would earn a total of 18.00 from holding Mercuries Life Insurance or generate 2.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mercuries Life Insurance vs. Union Insurance Co
Performance |
Timeline |
Mercuries Life Insurance |
Union Insurance |
Mercuries Life and Union Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mercuries Life and Union Insurance
The main advantage of trading using opposite Mercuries Life and Union Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercuries Life position performs unexpectedly, Union Insurance 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 Union Insurance will offset losses from the drop in Union Insurance's long position.Mercuries Life vs. CSBC Corp Taiwan | Mercuries Life vs. Hung Sheng Construction | Mercuries Life vs. Ton Yi Industrial | Mercuries Life vs. De Licacy Industrial |
Union Insurance vs. Shinkong Insurance Co | Union Insurance vs. Central Reinsurance Corp | Union Insurance vs. Taiwan Fire Marine | Union Insurance vs. Taichung Commercial Bank |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |