Correlation Between ClearShares OCIO and MerlynAI Corp

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

By analyzing existing cross correlation between ClearShares OCIO ETF and MerlynAI Corp, you can compare the effects of market volatilities on ClearShares OCIO and MerlynAI Corp 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 ClearShares OCIO with a short position of MerlynAI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ClearShares OCIO and MerlynAI Corp.

Diversification Opportunities for ClearShares OCIO and MerlynAI Corp

0.69

Correlation Coefficient

ClearShares OCIO  MerlynAI Corp

Poor diversification

The 3 months correlation between ClearShares and MerlynAI is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding ClearShares OCIO ETF and MerlynAI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MerlynAI Corp and ClearShares OCIO 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 ClearShares OCIO ETF are associated (or correlated) with MerlynAI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MerlynAI Corp has no effect on the direction of ClearShares OCIO i.e., ClearShares OCIO and MerlynAI Corp go up and down completely randomly.

Pair Corralation between ClearShares OCIO and MerlynAI Corp

If you would invest  3,396  in ClearShares OCIO ETF on September 22, 2024 and sell it today you would earn a total of  27.00  from holding ClearShares OCIO ETF or generate 0.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

ClearShares OCIO ETF  vs.  MerlynAI Corp

ClearShares OCIO ETF

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days ClearShares OCIO ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, ClearShares OCIO is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

MerlynAI Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MerlynAI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, MerlynAI Corp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ClearShares OCIO and MerlynAI Corp

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

The idea behind ClearShares OCIO ETF and MerlynAI Corp 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.