Correlation Between Merger Fund and Leuthold Select
Can any of the company-specific risk be diversified away by investing in both Merger Fund and Leuthold Select 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 Select 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 Select Industries, you can compare the effects of market volatilities on Merger Fund and Leuthold Select 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 Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merger Fund and Leuthold Select.
Diversification Opportunities for Merger Fund and Leuthold Select
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Merger and Leuthold is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding The Merger Fund and Leuthold Select Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leuthold Select Indu 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 Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leuthold Select Indu has no effect on the direction of Merger Fund i.e., Merger Fund and Leuthold Select go up and down completely randomly.
Pair Corralation between Merger Fund and Leuthold Select
Assuming the 90 days horizon The Merger Fund is expected to generate 0.05 times more return on investment than Leuthold Select. However, The Merger Fund is 19.07 times less risky than Leuthold Select. It trades about 0.12 of its potential returns per unit of risk. Leuthold Select Industries is currently generating about -0.21 per unit of risk. If you would invest 1,748 in The Merger Fund on September 14, 2024 and sell it today you would earn a total of 8.00 from holding The Merger Fund or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Merger Fund vs. Leuthold Select Industries
Performance |
| Timeline |
| Merger Fund |
| Leuthold Select Indu |
Merger Fund and Leuthold Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merger Fund and Leuthold Select
The main advantage of trading using opposite Merger Fund and Leuthold Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merger Fund position performs unexpectedly, Leuthold Select 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 Select will offset losses from the drop in Leuthold Select'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 Select vs. Stone Ridge Diversified | Leuthold Select vs. Wealthbuilder Conservative Allocation | Leuthold Select vs. Tax Free Conservative Income | Leuthold Select vs. Calvert Conservative Allocation |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| CEOs Directory Screen CEOs from public companies around the world |