Correlation Between Mercer Core and Mercer Non

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

By analyzing existing cross correlation between Mercer Core Fixed and Mercer Non US Core, you can compare the effects of market volatilities on Mercer Core and Mercer Non 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 Mercer Core with a short position of Mercer Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercer Core and Mercer Non.

Diversification Opportunities for Mercer Core and Mercer Non

0.44

Correlation Coefficient

Mercer Core  Mercer Non

Very weak diversification

The 3 months correlation between Mercer and Mercer is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mercer Core Fixed and Mercer Non US Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercer Non Core and Mercer Core 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 Mercer Core Fixed are associated (or correlated) with Mercer Non. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercer Non Core has no effect on the direction of Mercer Core i.e., Mercer Core and Mercer Non go up and down completely randomly.

Pair Corralation between Mercer Core and Mercer Non

Assuming the 90 days horizon Mercer Core is expected to generate 2.82 times less return on investment than Mercer Non. But when comparing it to its historical volatility, Mercer Core Fixed is 2.65 times less risky than Mercer Non. It trades about 0.18 of its potential returns per unit of risk. Mercer Non US Core is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,204  in Mercer Non US Core on May 22, 2025 and sell it today you would earn a total of  101.00  from holding Mercer Non US Core or generate 8.39% return on investment over 90 days.

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

Mercer Core Fixed  vs.  Mercer Non US Core

Mercer Core Fixed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mercer Core Fixed are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mercer Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mercer Non Core

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mercer Non US Core are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Mercer Non may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Mercer Core and Mercer Non

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

The idea behind Mercer Core Fixed and Mercer Non US Core 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.