Correlation Between Mercator Medical and CCC SA

Can any of the company-specific risk be diversified away by investing in both Mercator Medical and CCC SA 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 CCC SA 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 CCC SA, you can compare the effects of market volatilities on Mercator Medical and CCC SA 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 CCC SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercator Medical and CCC SA.

Diversification Opportunities for Mercator Medical and CCC SA

-0.5

Correlation Coefficient

Mercator Medical  CCC SA

Very good diversification

The 3 months correlation between Mercator and CCC is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Mercator Medical SA and CCC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCC 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 CCC SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCC SA has no effect on the direction of Mercator Medical i.e., Mercator Medical and CCC SA go up and down completely randomly.

Pair Corralation between Mercator Medical and CCC SA

Assuming the 90 days trading horizon Mercator Medical SA is expected to generate 0.48 times more return on investment than CCC SA. However, Mercator Medical SA is 2.09 times less risky than CCC SA. It trades about 0.07 of its potential returns per unit of risk. CCC SA is currently generating about -0.04 per unit of risk. If you would invest  4,400  in Mercator Medical SA on April 25, 2025 and sell it today you would earn a total of  230.00  from holding Mercator Medical SA or generate 5.23% return on investment over 90 days.

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

Mercator Medical SA  vs.  CCC SA

Mercator Medical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mercator Medical SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. 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.

CCC SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days CCC 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.

Pair Trading with Mercator Medical and CCC SA

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

The idea behind Mercator Medical SA and CCC 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.