Correlation Between Mercurity Fintech and Crexendo

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

By analyzing existing cross correlation between Mercurity Fintech Holding and Crexendo, you can compare the effects of market volatilities on Mercurity Fintech and Crexendo 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 Mercurity Fintech with a short position of Crexendo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercurity Fintech and Crexendo.

Diversification Opportunities for Mercurity Fintech and Crexendo

0.7

Correlation Coefficient

Mercurity Fintech  Crexendo

Poor diversification

The 3 months correlation between Mercurity and Crexendo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mercurity Fintech Holding and Crexendo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crexendo and Mercurity Fintech 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 Mercurity Fintech Holding are associated (or correlated) with Crexendo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crexendo has no effect on the direction of Mercurity Fintech i.e., Mercurity Fintech and Crexendo go up and down completely randomly.

Pair Corralation between Mercurity Fintech and Crexendo

Considering the 90-day investment horizon Mercurity Fintech Holding is expected to generate 1.27 times more return on investment than Crexendo. However, Mercurity Fintech is 1.27 times more volatile than Crexendo. It trades about 0.07 of its potential returns per unit of risk. Crexendo is currently generating about -0.15 per unit of risk. If you would invest  141.00  in Mercurity Fintech Holding on February 26, 2024 and sell it today you would earn a total of  8.00  from holding Mercurity Fintech Holding or generate 5.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Mercurity Fintech Holding  vs.  Crexendo

Mercurity Fintech Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mercurity Fintech Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Crexendo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crexendo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Mercurity Fintech and Crexendo

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

The idea behind Mercurity Fintech Holding and Crexendo 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.