Correlation Between Solstice Advanced and Mercer Bancorp

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

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

Diversification Opportunities for Solstice Advanced and Mercer Bancorp

-0.01

Correlation Coefficient

Solstice Advanced  Mercer Bancorp

Good diversification

The 3 months correlation between Solstice and Mercer is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Solstice Advanced Materials, and Mercer Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercer Bancorp and Solstice Advanced 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 Solstice Advanced Materials, are associated (or correlated) with Mercer Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercer Bancorp has no effect on the direction of Solstice Advanced i.e., Solstice Advanced and Mercer Bancorp go up and down completely randomly.

Pair Corralation between Solstice Advanced and Mercer Bancorp

Given the investment horizon of 90 days Solstice Advanced Materials, is expected to under-perform the Mercer Bancorp. In addition to that, Solstice Advanced is 6.16 times more volatile than Mercer Bancorp. It trades about -0.04 of its total potential returns per unit of risk. Mercer Bancorp is currently generating about 0.08 per unit of volatility. If you would invest  1,517  in Mercer Bancorp on August 27, 2025 and sell it today you would earn a total of  48.00  from holding Mercer Bancorp or generate 3.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	41.27%
Values	Daily Returns

Solstice Advanced Materials,  vs.  Mercer Bancorp

Solstice Advanced

Risk-Adjusted Performance

Weakest

Over the last 90 days Solstice Advanced Materials, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Mercer Bancorp

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Mercer Bancorp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Mercer Bancorp is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Solstice Advanced and Mercer Bancorp

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

The idea behind Solstice Advanced Materials, and Mercer Bancorp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.