Correlation Between International Stock and Mesirow Financial
Can any of the company-specific risk be diversified away by investing in both International Stock 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 International Stock and Mesirow Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Stock Fund and Mesirow Financial Small, you can compare the effects of market volatilities on International Stock 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 International Stock with a short position of Mesirow Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Stock and Mesirow Financial.
Diversification Opportunities for International Stock and Mesirow Financial
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Mesirow is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding International Stock 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 International Stock 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 International Stock 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 International Stock i.e., International Stock and Mesirow Financial go up and down completely randomly.
Pair Corralation between International Stock and Mesirow Financial
Assuming the 90 days horizon International Stock Fund is expected to under-perform the Mesirow Financial. But the mutual fund apears to be less risky and, when comparing its historical volatility, International Stock Fund is 1.31 times less risky than Mesirow Financial. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Mesirow Financial Small is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,144 in Mesirow Financial Small on August 29, 2024 and sell it today you would earn a total of 297.00 from holding Mesirow Financial Small or generate 25.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Stock Fund vs. Mesirow Financial Small
Performance |
| Timeline |
| International Stock |
| Mesirow Financial Small |
International Stock and Mesirow Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Stock and Mesirow Financial
The main advantage of trading using opposite International Stock and Mesirow Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Stock 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.| International Stock vs. Mid Cap Value Profund | International Stock vs. Lord Abbett Small | International Stock vs. Ultrasmall Cap Profund Ultrasmall Cap | International Stock vs. Boston Partners Small |
| Mesirow Financial vs. Vanguard Small Cap Index | Mesirow Financial vs. T Rowe Price | Mesirow Financial vs. HUMANA INC | Mesirow Financial vs. Aquagold International |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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