Correlation Between ETRADE Financial and Moelis

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

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

Diversification Opportunities for ETRADE Financial and Moelis

0.0

Correlation Coefficient

ETRADE Financial  Moelis

Pay attention - limited upside

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

Pair Corralation between ETRADE Financial and Moelis

If you would invest (100.00) in ETRADE Financial LLC on January 19, 2024 and sell it today you would earn a total of  100.00  from holding ETRADE Financial LLC or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ETRADE Financial LLC  vs.  Moelis Co

ETRADE Financial LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ETRADE Financial LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, ETRADE Financial is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Moelis

Risk-Adjusted Performance

0 of 100

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 rather sound fundamental indicators, Moelis is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ETRADE Financial and Moelis

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

The idea behind ETRADE Financial LLC and Moelis Co 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.