Correlation Between C Mer and Target
Can any of the company-specific risk be diversified away by investing in both C Mer and Target 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 Target 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 Target, you can compare the effects of market volatilities on C Mer and Target 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 Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Mer and Target.
Diversification Opportunities for C Mer and Target
Good diversification
The 3 months correlation between CMER and Target is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding C Mer Industries and Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target 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 Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target has no effect on the direction of C Mer i.e., C Mer and Target go up and down completely randomly.
Pair Corralation between C Mer and Target
Assuming the 90 days trading horizon C Mer Industries is expected to under-perform the Target. In addition to that, C Mer is 2.03 times more volatile than Target. It trades about -0.02 of its total potential returns per unit of risk. Target is currently generating about 0.08 per unit of volatility. If you would invest 14,830 in Target on February 12, 2024 and sell it today you would earn a total of 1,483 from holding Target or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.56% |
| Values | Daily Returns |
C Mer Industries vs. Target
Performance |
| Timeline |
| C Mer Industries |
| Target |
C Mer and Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C Mer and Target
The main advantage of trading using opposite C Mer and Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Mer position performs unexpectedly, Target 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 Target will offset losses from the drop in Target's long position.| C Mer vs. EN Shoham Business | C Mer vs. Accel Solutions Group | C Mer vs. Mivtach Shamir | C Mer vs. Rani Zim Shopping |
| Target vs. Costco Wholesale Corp | Target vs. BJs Wholesale Club | Target vs. Dollar Tree | Target vs. Dollar General |
Check out your portfolio center.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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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