Correlation Between Mainstay Nerstone and Mesirow Financial
Can any of the company-specific risk be diversified away by investing in both Mainstay Nerstone 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 Mainstay Nerstone and Mesirow Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Nerstone Growth and Mesirow Financial Small, you can compare the effects of market volatilities on Mainstay Nerstone 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 Mainstay Nerstone with a short position of Mesirow Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Nerstone and Mesirow Financial.
Diversification Opportunities for Mainstay Nerstone and Mesirow Financial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Mesirow is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Nerstone Growth 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 Mainstay Nerstone 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 Mainstay Nerstone Growth 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 Mainstay Nerstone i.e., Mainstay Nerstone and Mesirow Financial go up and down completely randomly.
Pair Corralation between Mainstay Nerstone and Mesirow Financial
Assuming the 90 days horizon Mainstay Nerstone Growth is expected to generate 0.96 times more return on investment than Mesirow Financial. However, Mainstay Nerstone Growth is 1.04 times less risky than Mesirow Financial. It trades about 0.15 of its potential returns per unit of risk. Mesirow Financial Small is currently generating about 0.13 per unit of risk. If you would invest 4,605 in Mainstay Nerstone Growth on September 2, 2024 and sell it today you would earn a total of 459.00 from holding Mainstay Nerstone Growth or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Nerstone Growth vs. Mesirow Financial Small
Performance |
| Timeline |
| Mainstay Nerstone Growth |
| Mesirow Financial Small |
Mainstay Nerstone and Mesirow Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Nerstone and Mesirow Financial
The main advantage of trading using opposite Mainstay Nerstone and Mesirow Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Nerstone 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.| Mainstay Nerstone vs. Scharf Global Opportunity | Mainstay Nerstone vs. Qs Large Cap | Mainstay Nerstone vs. Falcon Focus Scv | Mainstay Nerstone vs. T Rowe Price |
| Mesirow Financial vs. Gabelli Global Financial | Mesirow Financial vs. Mesirow Financial Small | Mesirow Financial vs. Icon Financial Fund | Mesirow Financial vs. Prudential Jennison Financial |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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