Correlation Between Performance Trust and Mercer Core

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

By analyzing existing cross correlation between Performance Trust Municipal and Mercer Core Fixed, you can compare the effects of market volatilities on Performance Trust and Mercer Core 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 Performance Trust with a short position of Mercer Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Trust and Mercer Core.

Diversification Opportunities for Performance Trust and Mercer Core

0.61

Correlation Coefficient

Performance Trust  Mercer Core

Poor diversification

The 3 months correlation between Performance and Mercer is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Performance Trust Municipal and Mercer Core Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercer Core Fixed and Performance Trust 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 Performance Trust Municipal are associated (or correlated) with Mercer Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercer Core Fixed has no effect on the direction of Performance Trust i.e., Performance Trust and Mercer Core go up and down completely randomly.

Pair Corralation between Performance Trust and Mercer Core

Assuming the 90 days horizon Performance Trust Municipal is expected to generate 0.83 times more return on investment than Mercer Core. However, Performance Trust Municipal is 1.2 times less risky than Mercer Core. It trades about 0.39 of its potential returns per unit of risk. Mercer Core Fixed is currently generating about 0.05 per unit of risk. If you would invest  2,183  in Performance Trust Municipal on September 4, 2025 and sell it today you would earn a total of  94.00  from holding Performance Trust Municipal or generate 4.31% return on investment over 90 days.

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

Performance Trust Municipal  vs.  Mercer Core Fixed

Performance Trust

Risk-Adjusted Performance

High

Compared to the overall equity markets, risk-adjusted returns on investments in Performance Trust Municipal are ranked lower than 31 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Performance Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mercer Core Fixed

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Mercer Core Fixed are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Mercer Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Performance Trust and Mercer Core

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

The idea behind Performance Trust Municipal and Mercer Core Fixed 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.