Correlation Between Zhibao Technology and Marsh McLennan
Can any of the company-specific risk be diversified away by investing in both Zhibao Technology and Marsh McLennan 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 Zhibao Technology and Marsh McLennan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zhibao Technology Class and Marsh McLennan Companies, you can compare the effects of market volatilities on Zhibao Technology and Marsh McLennan 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 Zhibao Technology with a short position of Marsh McLennan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhibao Technology and Marsh McLennan.
Diversification Opportunities for Zhibao Technology and Marsh McLennan
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zhibao and Marsh is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Zhibao Technology Class and Marsh McLennan Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marsh McLennan Companies and Zhibao Technology 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 Zhibao Technology Class are associated (or correlated) with Marsh McLennan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marsh McLennan Companies has no effect on the direction of Zhibao Technology i.e., Zhibao Technology and Marsh McLennan go up and down completely randomly.
Pair Corralation between Zhibao Technology and Marsh McLennan
Given the investment horizon of 90 days Zhibao Technology Class is expected to under-perform the Marsh McLennan. In addition to that, Zhibao Technology is 6.03 times more volatile than Marsh McLennan Companies. It trades about -0.06 of its total potential returns per unit of risk. Marsh McLennan Companies is currently generating about 0.29 per unit of volatility. If you would invest 22,102 in Marsh McLennan Companies on August 31, 2024 and sell it today you would earn a total of 1,222 from holding Marsh McLennan Companies or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhibao Technology Class vs. Marsh McLennan Companies
Performance |
| Timeline |
| Zhibao Technology Class |
| Marsh McLennan Companies |
Zhibao Technology and Marsh McLennan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhibao Technology and Marsh McLennan
The main advantage of trading using opposite Zhibao Technology and Marsh McLennan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhibao Technology position performs unexpectedly, Marsh McLennan 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 Marsh McLennan will offset losses from the drop in Marsh McLennan's long position.| Zhibao Technology vs. Cadence Design Systems | Zhibao Technology vs. IPG Photonics | Zhibao Technology vs. MagnaChip Semiconductor | Zhibao Technology vs. Advanced Micro Devices |
| Marsh McLennan vs. Arthur J Gallagher | Marsh McLennan vs. Willis Towers Watson | Marsh McLennan vs. Brown Brown | Marsh McLennan 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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