Correlation Between Icon Financial and Mesirow Financial
Can any of the company-specific risk be diversified away by investing in both Icon Financial 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 Icon Financial and Mesirow Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Financial Fund and Mesirow Financial Small, you can compare the effects of market volatilities on Icon Financial 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 Icon Financial with a short position of Mesirow Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Mesirow Financial.
Diversification Opportunities for Icon Financial and Mesirow Financial
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Mesirow is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial 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 Icon 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 Icon Financial 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 Icon Financial i.e., Icon Financial and Mesirow Financial go up and down completely randomly.
Pair Corralation between Icon Financial and Mesirow Financial
Assuming the 90 days horizon Icon Financial is expected to generate 2.45 times less return on investment than Mesirow Financial. But when comparing it to its historical volatility, Icon Financial Fund is 1.21 times less risky than Mesirow Financial. It trades about 0.04 of its potential returns per unit of risk. Mesirow Financial Small is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,119 in Mesirow Financial Small on August 24, 2024 and sell it today you would earn a total of 287.00 from holding Mesirow Financial Small or generate 25.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. Mesirow Financial Small
Performance |
| Timeline |
| Icon Financial |
| Mesirow Financial Small |
Icon Financial and Mesirow Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Mesirow Financial
The main advantage of trading using opposite Icon Financial and Mesirow Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial 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.| Icon Financial vs. Tax Managed Large Cap | Icon Financial vs. Rational Strategic Allocation | Icon Financial vs. Smead Value Fund | Icon Financial vs. T Rowe Price |
| Mesirow Financial vs. Federated High Yield | Mesirow Financial vs. Ab High Income | Mesirow Financial vs. T Rowe Price | Mesirow Financial vs. Siit High Yield |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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