Correlation Between C Mer and Brimag L

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

By analyzing existing cross correlation between C Mer Industries and Brimag L, you can compare the effects of market volatilities on C Mer and Brimag L 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 C Mer with a short position of Brimag L. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Mer and Brimag L.

Diversification Opportunities for C Mer and Brimag L

-0.07

Correlation Coefficient

C Mer  Brimag L

Good diversification

The 3 months correlation between CMER and Brimag is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding C Mer Industries and Brimag L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brimag L and C Mer 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 C Mer Industries are associated (or correlated) with Brimag L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brimag L has no effect on the direction of C Mer i.e., C Mer and Brimag L go up and down completely randomly.

Pair Corralation between C Mer and Brimag L

Assuming the 90 days trading horizon C Mer Industries is expected to generate 1.75 times more return on investment than Brimag L. However, C Mer is 1.75 times more volatile than Brimag L. It trades about 0.0 of its potential returns per unit of risk. Brimag L is currently generating about -0.27 per unit of risk. If you would invest  135,000  in C Mer Industries on February 5, 2024 and sell it today you would lose (2,100) from holding C Mer Industries or give up 1.56% of portfolio value over 90 days.

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

C Mer Industries  vs.  Brimag L

C Mer Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days C Mer Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Brimag L

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Brimag L are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Brimag L may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with C Mer and Brimag L

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

The idea behind C Mer Industries and Brimag L 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.