Correlation Between Marsh McLennan and BRP Old
Can any of the company-specific risk be diversified away by investing in both Marsh McLennan and BRP Old 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 Marsh McLennan and BRP Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marsh McLennan Companies and BRP Old, you can compare the effects of market volatilities on Marsh McLennan and BRP Old 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 Marsh McLennan with a short position of BRP Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marsh McLennan and BRP Old.
Diversification Opportunities for Marsh McLennan and BRP Old
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Marsh and BRP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Marsh McLennan Companies and BRP Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Old and Marsh McLennan 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 Marsh McLennan Companies are associated (or correlated) with BRP Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRP Old has no effect on the direction of Marsh McLennan i.e., Marsh McLennan and BRP Old go up and down completely randomly.
Pair Corralation between Marsh McLennan and BRP Old
If you would invest 21,035 in Marsh McLennan Companies on October 20, 2024 and sell it today you would earn a total of 488.00 from holding Marsh McLennan Companies or generate 2.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Marsh McLennan Companies vs. BRP Old
Performance |
| Timeline |
| Marsh McLennan Companies |
| BRP Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Marsh McLennan and BRP Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marsh McLennan and BRP Old
The main advantage of trading using opposite Marsh McLennan and BRP Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marsh McLennan position performs unexpectedly, BRP Old 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 BRP Old will offset losses from the drop in BRP Old's long position.| Marsh McLennan vs. Arthur J Gallagher | Marsh McLennan vs. Willis Towers Watson | Marsh McLennan vs. Brown Brown | Marsh McLennan vs. Erie Indemnity |
| BRP Old vs. Arthur J Gallagher | BRP Old vs. Marsh McLennan Companies | BRP Old vs. Willis Towers Watson | BRP Old vs. Erie Indemnity |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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