Correlation Between Marsh McLennan and FANH Old

Can any of the company-specific risk be diversified away by investing in both Marsh McLennan and FANH Old 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 FANH Old 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 FANH Old, you can compare the effects of market volatilities on Marsh McLennan and FANH Old 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 FANH Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marsh McLennan and FANH Old.

Diversification Opportunities for Marsh McLennan and FANH Old

0.0

Correlation Coefficient

Marsh McLennan  FANH Old

Pay attention - limited upside

The 3 months correlation between Marsh and FANH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Marsh McLennan Companies and FANH Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FANH Old 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 FANH Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FANH Old has no effect on the direction of Marsh McLennan i.e., Marsh McLennan and FANH Old go up and down completely randomly.

Pair Corralation between Marsh McLennan and FANH Old

If you would invest  20,911  in Marsh McLennan Companies on December 18, 2024 and sell it today you would earn a total of  2,380  from holding Marsh McLennan Companies or generate 11.38% 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.  FANH Old

Marsh McLennan Companies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marsh McLennan Companies are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, Marsh McLennan may actually be approaching a critical reversion point that can send shares even higher in April 2025.

FANH Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days FANH Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, FANH Old is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Marsh McLennan and FANH Old

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

The idea behind Marsh McLennan Companies and FANH Old 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.