Correlation Between Strategic Advisers and The Merger
Can any of the company-specific risk be diversified away by investing in both Strategic Advisers and The Merger 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 Strategic Advisers and The Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Advisers E and The Merger Fund, you can compare the effects of market volatilities on Strategic Advisers and The Merger 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 Strategic Advisers with a short position of The Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Advisers and The Merger.
Diversification Opportunities for Strategic Advisers and The Merger
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Strategic and The is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Advisers E and The Merger Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merger Fund and Strategic Advisers 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 Strategic Advisers E are associated (or correlated) with The Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merger Fund has no effect on the direction of Strategic Advisers i.e., Strategic Advisers and The Merger go up and down completely randomly.
Pair Corralation between Strategic Advisers and The Merger
Assuming the 90 days horizon Strategic Advisers is expected to generate 1.1 times less return on investment than The Merger. In addition to that, Strategic Advisers is 2.69 times more volatile than The Merger Fund. It trades about 0.05 of its total potential returns per unit of risk. The Merger Fund is currently generating about 0.14 per unit of volatility. If you would invest 1,620 in The Merger Fund on August 31, 2024 and sell it today you would earn a total of 135.00 from holding The Merger Fund or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Advisers E vs. The Merger Fund
Performance |
| Timeline |
| Strategic Advisers |
| Merger Fund |
Strategic Advisers and The Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Advisers and The Merger
The main advantage of trading using opposite Strategic Advisers and The Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Advisers position performs unexpectedly, The Merger 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 The Merger will offset losses from the drop in The Merger's long position.| Strategic Advisers vs. Dana Large Cap | Strategic Advisers vs. Virtus Nfj Large Cap | Strategic Advisers vs. Qs Large Cap | Strategic Advisers vs. Qs Large Cap |
| The Merger vs. Strategic Advisers International | The Merger vs. Strategic Advisers Income | The Merger vs. Strategic Advisers E | The Merger vs. Strategic Advisers Emerging |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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