Correlation Between CorVel Corp and Marsh McLennan
Can any of the company-specific risk be diversified away by investing in both CorVel Corp 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 CorVel Corp and Marsh McLennan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CorVel Corp and Marsh McLennan Companies, you can compare the effects of market volatilities on CorVel Corp 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 CorVel Corp with a short position of Marsh McLennan. Check out your portfolio center. Please also check ongoing floating volatility patterns of CorVel Corp and Marsh McLennan.
Diversification Opportunities for CorVel Corp and Marsh McLennan
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CorVel and Marsh is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CorVel Corp 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 CorVel Corp 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 CorVel Corp 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 CorVel Corp i.e., CorVel Corp and Marsh McLennan go up and down completely randomly.
Pair Corralation between CorVel Corp and Marsh McLennan
Given the investment horizon of 90 days CorVel Corp is expected to generate 2.12 times more return on investment than Marsh McLennan. However, CorVel Corp is 2.12 times more volatile than Marsh McLennan Companies. It trades about 0.1 of its potential returns per unit of risk. Marsh McLennan Companies is currently generating about 0.08 per unit of risk. If you would invest 19,470 in CorVel Corp on August 28, 2024 and sell it today you would earn a total of 17,132 from holding CorVel Corp or generate 87.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CorVel Corp vs. Marsh McLennan Companies
Performance |
| Timeline |
| CorVel Corp |
| Marsh McLennan Companies |
CorVel Corp and Marsh McLennan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CorVel Corp and Marsh McLennan
The main advantage of trading using opposite CorVel Corp and Marsh McLennan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CorVel Corp 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.| CorVel Corp vs. Erie Indemnity | CorVel Corp vs. Huize Holding | CorVel Corp vs. Crawford Company | CorVel Corp vs. eHealth |
| Marsh McLennan vs. GoHealth | Marsh McLennan vs. Tian Ruixiang Holdings | Marsh McLennan vs. Huize Holding | Marsh McLennan vs. CorVel Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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