Correlation Between Mesirow Financial and Firsthand Technology
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Firsthand Technology 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 Firsthand Technology 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 Firsthand Technology Opportunities, you can compare the effects of market volatilities on Mesirow Financial and Firsthand Technology 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 Firsthand Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Firsthand Technology.
Diversification Opportunities for Mesirow Financial and Firsthand Technology
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mesirow and Firsthand is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial High and Firsthand Technology Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firsthand Technology 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 Firsthand Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firsthand Technology has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Firsthand Technology go up and down completely randomly.
Pair Corralation between Mesirow Financial and Firsthand Technology
Assuming the 90 days horizon Mesirow Financial High is expected to under-perform the Firsthand Technology. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mesirow Financial High is 10.9 times less risky than Firsthand Technology. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Firsthand Technology Opportunities is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 390.00 in Firsthand Technology Opportunities on September 12, 2024 and sell it today you would earn a total of 16.00 from holding Firsthand Technology Opportunities or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesirow Financial High vs. Firsthand Technology Opportuni
Performance |
| Timeline |
| Mesirow Financial High |
| Firsthand Technology |
Mesirow Financial and Firsthand Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Firsthand Technology
The main advantage of trading using opposite Mesirow Financial and Firsthand Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Firsthand Technology 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 Firsthand Technology will offset losses from the drop in Firsthand Technology's long position.| Mesirow Financial vs. Lord Abbett Short | Mesirow Financial vs. Quantitative Longshort Equity | Mesirow Financial vs. Aqr Long Short Equity | Mesirow Financial vs. Franklin Federal Limited Term |
| Firsthand Technology vs. Berkshire Focus | Firsthand Technology vs. Red Oak Technology | Firsthand Technology vs. Jacob Internet Fund | Firsthand Technology vs. Kinetics Internet Fund |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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