Correlation Between Moelis and Associated Capital
Can any of the company-specific risk be diversified away by investing in both Moelis and Associated Capital 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 Moelis and Associated Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moelis Co and Associated Capital Group, you can compare the effects of market volatilities on Moelis and Associated Capital 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 Moelis with a short position of Associated Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moelis and Associated Capital.
Diversification Opportunities for Moelis and Associated Capital
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Moelis and Associated is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Moelis Co and Associated Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Capital and Moelis 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 Moelis Co are associated (or correlated) with Associated Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Capital has no effect on the direction of Moelis i.e., Moelis and Associated Capital go up and down completely randomly.
Pair Corralation between Moelis and Associated Capital
Allowing for the 90-day total investment horizon Moelis Co is expected to generate 1.16 times more return on investment than Associated Capital. However, Moelis is 1.16 times more volatile than Associated Capital Group. It trades about -0.02 of its potential returns per unit of risk. Associated Capital Group is currently generating about -0.1 per unit of risk. If you would invest 7,560 in Moelis Co on October 8, 2024 and sell it today you would lose (74.00) from holding Moelis Co or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moelis Co vs. Associated Capital Group
Performance |
| Timeline |
| Moelis |
| Associated Capital |
Moelis and Associated Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moelis and Associated Capital
The main advantage of trading using opposite Moelis and Associated Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moelis position performs unexpectedly, Associated Capital 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 Associated Capital will offset losses from the drop in Associated Capital's long position.The idea behind Moelis Co and Associated Capital Group 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.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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