Correlation Between Inventis and Mercury NZ

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

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

Diversification Opportunities for Inventis and Mercury NZ

0.1

Correlation Coefficient

Inventis  Mercury NZ

Average diversification

The 3 months correlation between Inventis and Mercury is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Inventis and Mercury NZ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercury NZ and Inventis 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 Inventis are associated (or correlated) with Mercury NZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercury NZ has no effect on the direction of Inventis i.e., Inventis and Mercury NZ go up and down completely randomly.

Pair Corralation between Inventis and Mercury NZ

If you would invest  536.00  in Mercury NZ on October 22, 2024 and sell it today you would earn a total of  2.00  from holding Mercury NZ or generate 0.37% return on investment over 90 days.

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

Inventis  vs.  Mercury NZ

Inventis

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mercury NZ

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mercury NZ has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Inventis and Mercury NZ

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

The idea behind Inventis and Mercury NZ 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.