Correlation Between Ab Value and Mesirow Financial
Can any of the company-specific risk be diversified away by investing in both Ab Value and Mesirow Financial 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 Ab Value and Mesirow Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Value Fund and Mesirow Financial Small, you can compare the effects of market volatilities on Ab Value and Mesirow Financial 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 Ab Value with a short position of Mesirow Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Value and Mesirow Financial.
Diversification Opportunities for Ab Value and Mesirow Financial
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ABVCX and MESIROW is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ab Value Fund and Mesirow Financial Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesirow Financial Small and Ab Value 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 Ab Value Fund are associated (or correlated) with Mesirow Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesirow Financial Small has no effect on the direction of Ab Value i.e., Ab Value and Mesirow Financial go up and down completely randomly.
Pair Corralation between Ab Value and Mesirow Financial
Assuming the 90 days horizon Ab Value Fund is expected to generate 0.65 times more return on investment than Mesirow Financial. However, Ab Value Fund is 1.55 times less risky than Mesirow Financial. It trades about 0.35 of its potential returns per unit of risk. Mesirow Financial Small is currently generating about 0.19 per unit of risk. If you would invest 1,941 in Ab Value Fund on August 31, 2024 and sell it today you would earn a total of 129.00 from holding Ab Value Fund or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Value Fund vs. Mesirow Financial Small
Performance |
| Timeline |
| Ab Value Fund |
| Mesirow Financial Small |
Ab Value and Mesirow Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Value and Mesirow Financial
The main advantage of trading using opposite Ab Value and Mesirow Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Value position performs unexpectedly, Mesirow Financial 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 Mesirow Financial will offset losses from the drop in Mesirow Financial's long position.| Ab Value vs. Mesirow Financial Small | Ab Value vs. John Hancock Financial | Ab Value vs. Royce Global Financial | Ab Value vs. Goldman Sachs Financial |
| Mesirow Financial vs. Absolute Convertible Arbitrage | Mesirow Financial vs. Advent Claymore Convertible | Mesirow Financial vs. The Gamco Global | Mesirow Financial vs. Columbia Vertible Securities |
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.
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