Correlation Between Mesirow Financial and Pax E
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Pax E 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 Mesirow Financial and Pax E into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mesirow Financial High and Pax E Bond, you can compare the effects of market volatilities on Mesirow Financial and Pax E 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 Mesirow Financial with a short position of Pax E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Pax E.
Diversification Opportunities for Mesirow Financial and Pax E
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mesirow and Pax is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial High and Pax E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pax E Bond and Mesirow 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 Mesirow Financial High are associated (or correlated) with Pax E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pax E Bond has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Pax E go up and down completely randomly.
Pair Corralation between Mesirow Financial and Pax E
Assuming the 90 days horizon Mesirow Financial High is expected to generate 0.47 times more return on investment than Pax E. However, Mesirow Financial High is 2.13 times less risky than Pax E. It trades about 0.25 of its potential returns per unit of risk. Pax E Bond is currently generating about 0.04 per unit of risk. If you would invest 720.00 in Mesirow Financial High on October 24, 2024 and sell it today you would earn a total of 137.00 from holding Mesirow Financial High or generate 19.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Mesirow Financial High vs. Pax E Bond
Performance |
| Timeline |
| Mesirow Financial High |
| Pax E Bond |
Mesirow Financial and Pax E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Pax E
The main advantage of trading using opposite Mesirow Financial and Pax E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Pax E 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 Pax E will offset losses from the drop in Pax E's long position.| Mesirow Financial vs. Elfun Government Money | Mesirow Financial vs. Vanguard Short Term Government | Mesirow Financial vs. Davis Government Bond | Mesirow Financial vs. Virtus Seix Government |
| Pax E vs. Siit High Yield | Pax E vs. Dunham High Yield | Pax E vs. Mesirow Financial High | Pax E vs. Ab High Income |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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