Correlation Between BRP Old and Marsh McLennan
Can any of the company-specific risk be diversified away by investing in both BRP Old and Marsh McLennan 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 BRP Old and Marsh McLennan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRP Old and Marsh McLennan Companies, you can compare the effects of market volatilities on BRP Old and Marsh McLennan 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 BRP Old with a short position of Marsh McLennan. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRP Old and Marsh McLennan.
Diversification Opportunities for BRP Old and Marsh McLennan
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BRP and Marsh is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding BRP Old and Marsh McLennan Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marsh McLennan Companies and BRP Old 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 BRP Old are associated (or correlated) with Marsh McLennan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marsh McLennan Companies has no effect on the direction of BRP Old i.e., BRP Old and Marsh McLennan go up and down completely randomly.
Pair Corralation between BRP Old and Marsh McLennan
If you would invest 21,241 in Marsh McLennan Companies on November 1, 2024 and sell it today you would earn a total of 842.00 from holding Marsh McLennan Companies or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
BRP Old vs. Marsh McLennan Companies
Performance |
| Timeline |
| BRP Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Marsh McLennan Companies |
BRP Old and Marsh McLennan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRP Old and Marsh McLennan
The main advantage of trading using opposite BRP Old and Marsh McLennan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRP Old position performs unexpectedly, Marsh McLennan 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 Marsh McLennan will offset losses from the drop in Marsh McLennan's long position.| BRP Old vs. Arthur J Gallagher | BRP Old vs. Marsh McLennan Companies | BRP Old vs. Willis Towers Watson | BRP Old vs. Erie Indemnity |
| Marsh McLennan vs. Arthur J Gallagher | Marsh McLennan vs. Willis Towers Watson | Marsh McLennan vs. Brown Brown | Marsh McLennan vs. Erie Indemnity |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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