Correlation Between Moelis and Commencement Bancorp

Can any of the company-specific risk be diversified away by investing in both Moelis and Commencement Bancorp 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 Moelis and Commencement Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Moelis Co and Commencement Bancorp, you can compare the effects of market volatilities on Moelis and Commencement Bancorp 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 Moelis with a short position of Commencement Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moelis and Commencement Bancorp.

Diversification Opportunities for Moelis and Commencement Bancorp

-0.05

Correlation Coefficient

Moelis  Commencement Bancorp

Good diversification

The 3 months correlation between Moelis and Commencement is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Moelis Co and Commencement Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commencement Bancorp and Moelis 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 Moelis Co are associated (or correlated) with Commencement Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commencement Bancorp has no effect on the direction of Moelis i.e., Moelis and Commencement Bancorp go up and down completely randomly.

Pair Corralation between Moelis and Commencement Bancorp

Allowing for the 90-day total investment horizon Moelis Co is expected to under-perform the Commencement Bancorp. In addition to that, Moelis is 2.16 times more volatile than Commencement Bancorp. It trades about -0.15 of its total potential returns per unit of risk. Commencement Bancorp is currently generating about 0.05 per unit of volatility. If you would invest  1,275  in Commencement Bancorp on December 20, 2024 and sell it today you would earn a total of  36.00  from holding Commencement Bancorp or generate 2.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Moelis Co  vs.  Commencement Bancorp

Moelis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Moelis Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Commencement Bancorp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Commencement Bancorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Commencement Bancorp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Moelis and Commencement Bancorp

The main advantage of trading using opposite Moelis and Commencement Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moelis position performs unexpectedly, Commencement Bancorp 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 Commencement Bancorp will offset losses from the drop in Commencement Bancorp's long position.

The idea behind Moelis Co and Commencement Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Managers module to screen money managers from public funds and ETFs managed around the world.