Correlation Between Mercurity Fintech and Clearwater Analytics

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

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

Diversification Opportunities for Mercurity Fintech and Clearwater Analytics

0.65

Correlation Coefficient

Mercurity Fintech  Clearwater Analytics

Poor diversification

The 3 months correlation between Mercurity and Clearwater is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mercurity Fintech Holding and Clearwater Analytics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearwater Analytics and Mercurity Fintech 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 Mercurity Fintech Holding are associated (or correlated) with Clearwater Analytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearwater Analytics has no effect on the direction of Mercurity Fintech i.e., Mercurity Fintech and Clearwater Analytics go up and down completely randomly.

Pair Corralation between Mercurity Fintech and Clearwater Analytics

Considering the 90-day investment horizon Mercurity Fintech Holding is expected to generate 4.42 times more return on investment than Clearwater Analytics. However, Mercurity Fintech is 4.42 times more volatile than Clearwater Analytics Holdings. It trades about 0.08 of its potential returns per unit of risk. Clearwater Analytics Holdings is currently generating about 0.05 per unit of risk. If you would invest  118.00  in Mercurity Fintech Holding on September 26, 2024 and sell it today you would earn a total of  463.00  from holding Mercurity Fintech Holding or generate 392.37% return on investment over 90 days.

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

Mercurity Fintech Holding  vs.  Clearwater Analytics Holdings

Mercurity Fintech Holding

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mercurity Fintech Holding are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical and fundamental indicators, Mercurity Fintech demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Clearwater Analytics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Clearwater Analytics Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Clearwater Analytics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mercurity Fintech and Clearwater Analytics

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

The idea behind Mercurity Fintech Holding and Clearwater Analytics Holdings 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.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.