Correlation Between Mercator Medical and Mo Bruk

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

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

Diversification Opportunities for Mercator Medical and Mo Bruk

-0.53

Correlation Coefficient

Mercator Medical  Mo Bruk

Excellent diversification

The 3 months correlation between Mercator and MBR is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mercator Medical SA and Mo Bruk SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mo Bruk SA and Mercator Medical 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 Mercator Medical SA are associated (or correlated) with Mo Bruk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mo Bruk SA has no effect on the direction of Mercator Medical i.e., Mercator Medical and Mo Bruk go up and down completely randomly.

Pair Corralation between Mercator Medical and Mo Bruk

Assuming the 90 days trading horizon Mercator Medical is expected to generate 131.76 times less return on investment than Mo Bruk. But when comparing it to its historical volatility, Mercator Medical SA is 39.31 times less risky than Mo Bruk. It trades about 0.03 of its potential returns per unit of risk. Mo Bruk SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  27,069  in Mo Bruk SA on October 27, 2024 and sell it today you would earn a total of  8,231  from holding Mo Bruk SA or generate 30.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.79%
Values	Daily Returns

Mercator Medical SA  vs.  Mo Bruk SA

Mercator Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mercator Medical SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Mo Bruk SA

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mo Bruk SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Mo Bruk reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mercator Medical and Mo Bruk

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

The idea behind Mercator Medical SA and Mo Bruk SA 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.