Correlation Between Merger Fund and Wcm Alternatives
Can any of the company-specific risk be diversified away by investing in both Merger Fund and Wcm Alternatives 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 Wcm Alternatives 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 Wcm Alternatives Event Driven, you can compare the effects of market volatilities on Merger Fund and Wcm Alternatives 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 Wcm Alternatives. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merger Fund and Wcm Alternatives.
Diversification Opportunities for Merger Fund and Wcm Alternatives
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Merger and Wcm is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding The Merger Fund and Wcm Alternatives Event Driven in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wcm Alternatives Event 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 Wcm Alternatives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wcm Alternatives Event has no effect on the direction of Merger Fund i.e., Merger Fund and Wcm Alternatives go up and down completely randomly.
Pair Corralation between Merger Fund and Wcm Alternatives
Assuming the 90 days horizon Merger Fund is expected to generate 1.08 times less return on investment than Wcm Alternatives. But when comparing it to its historical volatility, The Merger Fund is 1.52 times less risky than Wcm Alternatives. It trades about 0.07 of its potential returns per unit of risk. Wcm Alternatives Event Driven is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,081 in Wcm Alternatives Event Driven on September 12, 2024 and sell it today you would earn a total of 31.00 from holding Wcm Alternatives Event Driven or generate 2.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Merger Fund vs. Wcm Alternatives Event Driven
Performance |
| Timeline |
| Merger Fund |
| Wcm Alternatives Event |
Merger Fund and Wcm Alternatives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merger Fund and Wcm Alternatives
The main advantage of trading using opposite Merger Fund and Wcm Alternatives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merger Fund position performs unexpectedly, Wcm Alternatives 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 Wcm Alternatives will offset losses from the drop in Wcm Alternatives' 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 |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |