Correlation Between Ridgeworth Seix and The Merger

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

By analyzing existing cross correlation between Ridgeworth Seix High and The Merger Fund, you can compare the effects of market volatilities on Ridgeworth Seix and The Merger 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 Ridgeworth Seix with a short position of The Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ridgeworth Seix and The Merger.

Diversification Opportunities for Ridgeworth Seix and The Merger

0.93

Correlation Coefficient

Ridgeworth Seix  The Merger

Almost no diversification

The 3 months correlation between Ridgeworth and The is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Ridgeworth Seix High and The Merger Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merger Fund and Ridgeworth Seix 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 Ridgeworth Seix High are associated (or correlated) with The Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merger Fund has no effect on the direction of Ridgeworth Seix i.e., Ridgeworth Seix and The Merger go up and down completely randomly.

Pair Corralation between Ridgeworth Seix and The Merger

Assuming the 90 days horizon Ridgeworth Seix High is expected to generate 1.92 times more return on investment than The Merger. However, Ridgeworth Seix is 1.92 times more volatile than The Merger Fund. It trades about 0.25 of its potential returns per unit of risk. The Merger Fund is currently generating about 0.39 per unit of risk. If you would invest  764.00  in Ridgeworth Seix High on May 6, 2025 and sell it today you would earn a total of  23.00  from holding Ridgeworth Seix High or generate 3.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Ridgeworth Seix High  vs.  The Merger Fund

Ridgeworth Seix High

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ridgeworth Seix High are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ridgeworth Seix is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Merger Fund

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in The Merger Fund are ranked lower than 30 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, The Merger is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ridgeworth Seix and The Merger

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

The idea behind Ridgeworth Seix High and The Merger Fund 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.