Correlation Between Piper Sandler and Mercurity Fintech

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

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

Diversification Opportunities for Piper Sandler and Mercurity Fintech

0.8

Correlation Coefficient

Piper Sandler  Mercurity Fintech

Very poor diversification

The 3 months correlation between Piper and Mercurity is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Piper Sandler Companies and Mercurity Fintech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercurity Fintech Holding and Piper Sandler 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 Piper Sandler Companies are associated (or correlated) with Mercurity Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercurity Fintech Holding has no effect on the direction of Piper Sandler i.e., Piper Sandler and Mercurity Fintech go up and down completely randomly.

Pair Corralation between Piper Sandler and Mercurity Fintech

Given the investment horizon of 90 days Piper Sandler Companies is expected to under-perform the Mercurity Fintech. But the stock apears to be less risky and, when comparing its historical volatility, Piper Sandler Companies is 2.88 times less risky than Mercurity Fintech. The stock trades about -0.13 of its potential returns per unit of risk. The Mercurity Fintech Holding is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  713.00  in Mercurity Fintech Holding on December 29, 2024 and sell it today you would lose (146.00) from holding Mercurity Fintech Holding or give up 20.48% of portfolio value over 90 days.

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

Piper Sandler Companies  vs.  Mercurity Fintech Holding

Piper Sandler Companies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Piper Sandler Companies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Mercurity Fintech Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mercurity Fintech Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Piper Sandler and Mercurity Fintech

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

The idea behind Piper Sandler Companies and Mercurity Fintech Holding 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.