Correlation Between Stonex and Mercurity Fintech

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

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

Diversification Opportunities for Stonex and Mercurity Fintech

-0.02

Correlation Coefficient

Stonex  Mercurity Fintech

Good diversification

The 3 months correlation between Stonex and Mercurity is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Stonex Group 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 Stonex 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 Stonex Group 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 Stonex i.e., Stonex and Mercurity Fintech go up and down completely randomly.

Pair Corralation between Stonex and Mercurity Fintech

Given the investment horizon of 90 days Stonex Group is expected to generate 0.41 times more return on investment than Mercurity Fintech. However, Stonex Group is 2.47 times less risky than Mercurity Fintech. It trades about 0.11 of its potential returns per unit of risk. Mercurity Fintech Holding is currently generating about -0.03 per unit of risk. If you would invest  6,544  in Stonex Group on December 29, 2024 and sell it today you would earn a total of  1,068  from holding Stonex Group or generate 16.32% return on investment over 90 days.

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

Stonex Group  vs.  Mercurity Fintech Holding

Stonex Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stonex Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Stonex showed solid returns over the last few months and may actually be approaching a breakup point.

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 Stonex and Mercurity Fintech

The main advantage of trading using opposite Stonex and Mercurity Fintech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stonex 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 Stonex Group 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.