Correlation Between MSP Recovery and Affiliated Managers

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

By analyzing existing cross correlation between MSP Recovery and Affiliated Managers Group, you can compare the effects of market volatilities on MSP Recovery and Affiliated Managers 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 MSP Recovery with a short position of Affiliated Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSP Recovery and Affiliated Managers.

Diversification Opportunities for MSP Recovery and Affiliated Managers

-0.85

Correlation Coefficient

MSP Recovery  Affiliated Managers

Pay attention - limited upside

The 3 months correlation between MSP and Affiliated is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding MSP Recovery and Affiliated Managers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers and MSP Recovery 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 MSP Recovery are associated (or correlated) with Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of MSP Recovery i.e., MSP Recovery and Affiliated Managers go up and down completely randomly.

Pair Corralation between MSP Recovery and Affiliated Managers

Given the investment horizon of 90 days MSP Recovery is expected to generate 11.64 times more return on investment than Affiliated Managers. However, MSP Recovery is 11.64 times more volatile than Affiliated Managers Group. It trades about 0.05 of its potential returns per unit of risk. Affiliated Managers Group is currently generating about -0.08 per unit of risk. If you would invest  230.00  in MSP Recovery on October 9, 2024 and sell it today you would earn a total of  3.00  from holding MSP Recovery or generate 1.3% return on investment over 90 days.

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

MSP Recovery  vs.  Affiliated Managers Group

MSP Recovery

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MSP Recovery are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, MSP Recovery reported solid returns over the last few months and may actually be approaching a breakup point.

Affiliated Managers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Affiliated Managers Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with MSP Recovery and Affiliated Managers

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

The idea behind MSP Recovery and Affiliated Managers Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.