Correlation Between Evercore Partners and Mercurity Fintech

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

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

Diversification Opportunities for Evercore Partners and Mercurity Fintech

-0.61

Correlation Coefficient

Evercore Partners  Mercurity Fintech

Excellent diversification

The 3 months correlation between Evercore and Mercurity is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Evercore Partners 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 Evercore Partners 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 Evercore Partners 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 Evercore Partners i.e., Evercore Partners and Mercurity Fintech go up and down completely randomly.

Pair Corralation between Evercore Partners and Mercurity Fintech

Considering the 90-day investment horizon Evercore Partners is expected to generate 0.17 times more return on investment than Mercurity Fintech. However, Evercore Partners is 5.81 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 -0.11 per unit of risk. If you would invest  17,514  in Evercore Partners on February 8, 2024 and sell it today you would earn a total of  1,796  from holding Evercore Partners or generate 10.25% return on investment over 90 days.

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

Evercore Partners  vs.  Mercurity Fintech Holding

Evercore Partners

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Evercore Partners are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Evercore Partners may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Mercurity Fintech Holding

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Evercore Partners and Mercurity Fintech

The main advantage of trading using opposite Evercore Partners and Mercurity Fintech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evercore Partners 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 Evercore Partners 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.