Correlation Between Moelis and ADGLXY

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

By analyzing existing cross correlation between Moelis Co and ADGLXY 294 30 SEP 40, you can compare the effects of market volatilities on Moelis and ADGLXY 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 ADGLXY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moelis and ADGLXY.

Diversification Opportunities for Moelis and ADGLXY

0.46

Correlation Coefficient

Moelis  ADGLXY

Very weak diversification

The 3 months correlation between Moelis and ADGLXY is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Moelis Co and ADGLXY 294 30 SEP 40 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADGLXY 294 30 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 ADGLXY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADGLXY 294 30 has no effect on the direction of Moelis i.e., Moelis and ADGLXY go up and down completely randomly.

Pair Corralation between Moelis and ADGLXY

Allowing for the 90-day total investment horizon Moelis Co is expected to under-perform the ADGLXY. In addition to that, Moelis is 2.26 times more volatile than ADGLXY 294 30 SEP 40. It trades about -0.15 of its total potential returns per unit of risk. ADGLXY 294 30 SEP 40 is currently generating about 0.15 per unit of volatility. If you would invest  7,930  in ADGLXY 294 30 SEP 40 on December 23, 2024 and sell it today you would earn a total of  148.00  from holding ADGLXY 294 30 SEP 40 or generate 1.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	22.95%
Values	Daily Returns

Moelis Co  vs.  ADGLXY 294 30 SEP 40

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.

ADGLXY 294 30

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ADGLXY 294 30 SEP 40 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ADGLXY may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Moelis and ADGLXY

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

The idea behind Moelis Co and ADGLXY 294 30 SEP 40 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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.