Correlation Between Mesirow Financial and Western Asset
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Western Asset 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 Western Asset 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 Western Asset Intermediate, you can compare the effects of market volatilities on Mesirow Financial and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Western Asset.
Diversification Opportunities for Mesirow Financial and Western Asset
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mesirow and Western is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial High and Western Asset Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Interm 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Interm has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Western Asset go up and down completely randomly.
Pair Corralation between Mesirow Financial and Western Asset
Assuming the 90 days horizon Mesirow Financial High is expected to generate 0.7 times more return on investment than Western Asset. However, Mesirow Financial High is 1.43 times less risky than Western Asset. It trades about 0.17 of its potential returns per unit of risk. Western Asset Intermediate is currently generating about -0.06 per unit of risk. If you would invest 842.00 in Mesirow Financial High on September 2, 2024 and sell it today you would earn a total of 14.00 from holding Mesirow Financial High or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesirow Financial High vs. Western Asset Intermediate
Performance |
| Timeline |
| Mesirow Financial High |
| Western Asset Interm |
Mesirow Financial and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Western Asset
The main advantage of trading using opposite Mesirow Financial and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Mesirow Financial vs. Mesirow Financial Small | Mesirow Financial vs. Mesirow Financial Small | Mesirow Financial vs. Mesirow Enhanced Core |
| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |