Correlation Between Mercantile Investment and Amundi Physical

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

By analyzing existing cross correlation between The Mercantile Investment and Amundi Physical Gold, you can compare the effects of market volatilities on Mercantile Investment and Amundi Physical 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 Mercantile Investment with a short position of Amundi Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercantile Investment and Amundi Physical.

Diversification Opportunities for Mercantile Investment and Amundi Physical

0.34

Correlation Coefficient

Mercantile Investment  Amundi Physical

Weak diversification

The 3 months correlation between Mercantile and Amundi is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding The Mercantile Investment and Amundi Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Physical Gold and Mercantile Investment 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 The Mercantile Investment are associated (or correlated) with Amundi Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Physical Gold has no effect on the direction of Mercantile Investment i.e., Mercantile Investment and Amundi Physical go up and down completely randomly.

Pair Corralation between Mercantile Investment and Amundi Physical

Assuming the 90 days trading horizon Mercantile Investment is expected to generate 69.1 times less return on investment than Amundi Physical. In addition to that, Mercantile Investment is 1.38 times more volatile than Amundi Physical Gold. It trades about 0.0 of its total potential returns per unit of risk. Amundi Physical Gold is currently generating about 0.26 per unit of volatility. If you would invest  823,650  in Amundi Physical Gold on December 30, 2024 and sell it today you would earn a total of  120,863  from holding Amundi Physical Gold or generate 14.67% return on investment over 90 days.

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

The Mercantile Investment  vs.  Amundi Physical Gold

The Mercantile Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Mercantile Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Mercantile Investment is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Amundi Physical Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Physical Gold are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Amundi Physical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mercantile Investment and Amundi Physical

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

The idea behind The Mercantile Investment and Amundi Physical Gold 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.