Correlation Between Merger Fund and Leuthold E
Can any of the company-specific risk be diversified away by investing in both Merger Fund and Leuthold E 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 Merger Fund and Leuthold E into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Merger Fund and Leuthold E Investment, you can compare the effects of market volatilities on Merger Fund and Leuthold E 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 Merger Fund with a short position of Leuthold E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merger Fund and Leuthold E.
Diversification Opportunities for Merger Fund and Leuthold E
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Merger and Leuthold is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding The Merger Fund and Leuthold E Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leuthold E Investment and Merger Fund 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 The Merger Fund are associated (or correlated) with Leuthold E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leuthold E Investment has no effect on the direction of Merger Fund i.e., Merger Fund and Leuthold E go up and down completely randomly.
Pair Corralation between Merger Fund and Leuthold E
Assuming the 90 days horizon Merger Fund is expected to generate 1.76 times less return on investment than Leuthold E. But when comparing it to its historical volatility, The Merger Fund is 3.25 times less risky than Leuthold E. It trades about 0.08 of its potential returns per unit of risk. Leuthold E Investment is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,961 in Leuthold E Investment on September 14, 2024 and sell it today you would earn a total of 234.00 from holding Leuthold E Investment or generate 11.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Merger Fund vs. Leuthold E Investment
Performance |
| Timeline |
| Merger Fund |
| Leuthold E Investment |
Merger Fund and Leuthold E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merger Fund and Leuthold E
The main advantage of trading using opposite Merger Fund and Leuthold E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merger Fund position performs unexpectedly, Leuthold E 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 Leuthold E will offset losses from the drop in Leuthold E's long position.| Merger Fund vs. Strategic Advisers International | Merger Fund vs. Strategic Advisers Income | Merger Fund vs. Strategic Advisers E | Merger Fund vs. Strategic Advisers Emerging |
| Leuthold E vs. Hussman Strategic Growth | Leuthold E vs. Fpa Crescent Fund | Leuthold E vs. The Merger Fund | Leuthold E vs. Leuthold Select Industries |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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