Correlation Between Marsh McLennan and 7125 Percent
Can any of the company-specific risk be diversified away by investing in both Marsh McLennan and 7125 Percent 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 7125 Percent 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 7125 percent Fixed Rate, you can compare the effects of market volatilities on Marsh McLennan and 7125 Percent 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 7125 Percent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marsh McLennan and 7125 Percent.
Diversification Opportunities for Marsh McLennan and 7125 Percent
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Marsh and 7125 is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Marsh McLennan Companies and 7125 percent Fixed Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 7125 percent Fixed 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 7125 Percent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 7125 percent Fixed has no effect on the direction of Marsh McLennan i.e., Marsh McLennan and 7125 Percent go up and down completely randomly.
Pair Corralation between Marsh McLennan and 7125 Percent
Considering the 90-day investment horizon Marsh McLennan Companies is expected to generate 2.74 times more return on investment than 7125 Percent. However, Marsh McLennan is 2.74 times more volatile than 7125 percent Fixed Rate. It trades about 0.2 of its potential returns per unit of risk. 7125 percent Fixed Rate is currently generating about -0.17 per unit of risk. If you would invest 22,301 in Marsh McLennan Companies on November 28, 2024 and sell it today you would earn a total of 855.00 from holding Marsh McLennan Companies or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marsh McLennan Companies vs. 7125 percent Fixed Rate
Performance |
| Timeline |
| Marsh McLennan Companies |
| 7125 percent Fixed |
Marsh McLennan and 7125 Percent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marsh McLennan and 7125 Percent
The main advantage of trading using opposite Marsh McLennan and 7125 Percent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marsh McLennan position performs unexpectedly, 7125 Percent 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 7125 Percent will offset losses from the drop in 7125 Percent'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 |
| 7125 Percent vs. Reinsurance Group of | 7125 Percent vs. Southern Co | 7125 Percent vs. Prudential Financial 5950 | 7125 Percent vs. CMS Energy Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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