Correlation Between TEN SQUARE and Mercator Medical

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

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

Diversification Opportunities for TEN SQUARE and Mercator Medical

0.69

Correlation Coefficient

TEN SQUARE  Mercator Medical

Poor diversification

The 3 months correlation between TEN and Mercator is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding TEN SQUARE GAMES and Mercator Medical SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercator Medical and TEN SQUARE 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 TEN SQUARE GAMES are associated (or correlated) with Mercator Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercator Medical has no effect on the direction of TEN SQUARE i.e., TEN SQUARE and Mercator Medical go up and down completely randomly.

Pair Corralation between TEN SQUARE and Mercator Medical

Assuming the 90 days trading horizon TEN SQUARE GAMES is expected to under-perform the Mercator Medical. But the stock apears to be less risky and, when comparing its historical volatility, TEN SQUARE GAMES is 1.4 times less risky than Mercator Medical. The stock trades about -0.08 of its potential returns per unit of risk. The Mercator Medical SA is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  5,620  in Mercator Medical SA on October 23, 2024 and sell it today you would lose (410.00) from holding Mercator Medical SA or give up 7.3% of portfolio value over 90 days.

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

TEN SQUARE GAMES  vs.  Mercator Medical SA

TEN SQUARE GAMES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TEN SQUARE GAMES 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.

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 relatively invariable basic indicators, Mercator Medical is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with TEN SQUARE and Mercator Medical

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

The idea behind TEN SQUARE GAMES and Mercator Medical 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.