Correlation Between GLT Old and Mercer International

Can any of the company-specific risk be diversified away by investing in both GLT Old and Mercer International 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 GLT Old and Mercer International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GLT Old and Mercer International, you can compare the effects of market volatilities on GLT Old and Mercer International 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 GLT Old with a short position of Mercer International. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLT Old and Mercer International.

Diversification Opportunities for GLT Old and Mercer International

0.0

Correlation Coefficient

GLT Old  Mercer International

Pay attention - limited upside

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

Pair Corralation between GLT Old and Mercer International

If you would invest  600.00  in Mercer International on December 18, 2024 and sell it today you would earn a total of  41.00  from holding Mercer International or generate 6.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GLT Old  vs.  Mercer International

GLT Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days GLT Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, GLT Old is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Mercer International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mercer International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Mercer International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with GLT Old and Mercer International

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

The idea behind GLT Old and Mercer International 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.