Correlation Between Marsh McLennan and Mountain Crest
Can any of the company-specific risk be diversified away by investing in both Marsh McLennan and Mountain Crest 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 Mountain Crest 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 Mountain Crest Acquisition, you can compare the effects of market volatilities on Marsh McLennan and Mountain Crest 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 Mountain Crest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marsh McLennan and Mountain Crest.
Diversification Opportunities for Marsh McLennan and Mountain Crest
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marsh and Mountain is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Marsh McLennan Companies and Mountain Crest Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mountain Crest Acqui 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 Mountain Crest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mountain Crest Acqui has no effect on the direction of Marsh McLennan i.e., Marsh McLennan and Mountain Crest go up and down completely randomly.
Pair Corralation between Marsh McLennan and Mountain Crest
If you would invest 20,498 in Marsh McLennan Companies on September 1, 2024 and sell it today you would earn a total of 2,825 from holding Marsh McLennan Companies or generate 13.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Marsh McLennan Companies vs. Mountain Crest Acquisition
Performance |
| Timeline |
| Marsh McLennan Companies |
| Mountain Crest Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Marsh McLennan and Mountain Crest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marsh McLennan and Mountain Crest
The main advantage of trading using opposite Marsh McLennan and Mountain Crest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marsh McLennan position performs unexpectedly, Mountain Crest 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 Mountain Crest will offset losses from the drop in Mountain Crest'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 |
| Mountain Crest vs. Reservoir Media | Mountain Crest vs. Lululemon Athletica | Mountain Crest vs. Asbury Automotive Group | Mountain Crest vs. SunLink Health Systems |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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