Correlation Between Multisector Bond and Mesirow Financial
Can any of the company-specific risk be diversified away by investing in both Multisector Bond 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 Multisector Bond and Mesirow Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multisector Bond Sma and Mesirow Financial Small, you can compare the effects of market volatilities on Multisector Bond 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 Multisector Bond with a short position of Mesirow Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multisector Bond and Mesirow Financial.
Diversification Opportunities for Multisector Bond and Mesirow Financial
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Multisector and Mesirow is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Multisector Bond Sma 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 Multisector Bond 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 Multisector Bond Sma 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 Multisector Bond i.e., Multisector Bond and Mesirow Financial go up and down completely randomly.
Pair Corralation between Multisector Bond and Mesirow Financial
Assuming the 90 days horizon Multisector Bond Sma is expected to generate 0.2 times more return on investment than Mesirow Financial. However, Multisector Bond Sma is 4.9 times less risky than Mesirow Financial. It trades about 0.2 of its potential returns per unit of risk. Mesirow Financial Small is currently generating about -0.24 per unit of risk. If you would invest 1,362 in Multisector Bond Sma on November 27, 2024 and sell it today you would earn a total of 11.00 from holding Multisector Bond Sma or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multisector Bond Sma vs. Mesirow Financial Small
Performance |
| Timeline |
| Multisector Bond Sma |
| Mesirow Financial Small |
Multisector Bond and Mesirow Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multisector Bond and Mesirow Financial
The main advantage of trading using opposite Multisector Bond and Mesirow Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multisector Bond 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.| Multisector Bond vs. Jhancock Diversified Macro | Multisector Bond vs. Goldman Sachs Emerging | Multisector Bond vs. Legg Mason Western | Multisector Bond vs. Barings Emerging Markets |
| Mesirow Financial vs. Credit Suisse Multialternative | Mesirow Financial vs. Small Pany Growth | Mesirow Financial vs. Glg Intl Small | Mesirow Financial vs. Versatile Bond Portfolio |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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