Correlation Between Marsh McLennan and Nova Vision
Can any of the company-specific risk be diversified away by investing in both Marsh McLennan and Nova Vision 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 Nova Vision 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 Nova Vision Acquisition, you can compare the effects of market volatilities on Marsh McLennan and Nova Vision 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 Nova Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marsh McLennan and Nova Vision.
Diversification Opportunities for Marsh McLennan and Nova Vision
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Marsh and Nova is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Marsh McLennan Companies and Nova Vision Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Vision Acquisition 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 Nova Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Vision Acquisition has no effect on the direction of Marsh McLennan i.e., Marsh McLennan and Nova Vision go up and down completely randomly.
Pair Corralation between Marsh McLennan and Nova Vision
If you would invest 22,301 in Marsh McLennan Companies on November 28, 2024 and sell it today you would earn a total of 958.00 from holding Marsh McLennan Companies or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Marsh McLennan Companies vs. Nova Vision Acquisition
Performance |
| Timeline |
| Marsh McLennan Companies |
| Nova Vision Acquisition |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Marsh McLennan and Nova Vision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marsh McLennan and Nova Vision
The main advantage of trading using opposite Marsh McLennan and Nova Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marsh McLennan position performs unexpectedly, Nova Vision 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 Nova Vision will offset losses from the drop in Nova Vision'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 |
| Nova Vision vs. Mattel Inc | Nova Vision vs. Hasbro Inc | Nova Vision vs. Globalfoundries | Nova Vision vs. Arm Holdings plc |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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