Correlation Between Meridian Equity and Mesirow Financial
Can any of the company-specific risk be diversified away by investing in both Meridian Equity 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 Meridian Equity and Mesirow Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meridian Equity Income and Mesirow Financial Small, you can compare the effects of market volatilities on Meridian Equity 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 Meridian Equity with a short position of Mesirow Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Equity and Mesirow Financial.
Diversification Opportunities for Meridian Equity and Mesirow Financial
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Meridian and Mesirow is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Equity Income 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 Meridian Equity 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 Meridian Equity Income 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 Meridian Equity i.e., Meridian Equity and Mesirow Financial go up and down completely randomly.
Pair Corralation between Meridian Equity and Mesirow Financial
Assuming the 90 days horizon Meridian Equity is expected to generate 1.44 times less return on investment than Mesirow Financial. But when comparing it to its historical volatility, Meridian Equity Income is 1.87 times less risky than Mesirow Financial. It trades about 0.1 of its potential returns per unit of risk. Mesirow Financial Small is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,175 in Mesirow Financial Small on September 14, 2024 and sell it today you would earn a total of 245.00 from holding Mesirow Financial Small or generate 20.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meridian Equity Income vs. Mesirow Financial Small
Performance |
| Timeline |
| Meridian Equity Income |
| Mesirow Financial Small |
Meridian Equity and Mesirow Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Equity and Mesirow Financial
The main advantage of trading using opposite Meridian Equity and Mesirow Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Equity 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.| Meridian Equity vs. Meridian Trarian Fund | Meridian Equity vs. Meridian Equity Income | Meridian Equity vs. Meridian Growth Fund | Meridian Equity vs. Meridian Trarian Fund |
| Mesirow Financial vs. Lord Abbett Inflation | Mesirow Financial vs. Arrow Managed Futures | Mesirow Financial vs. Fidelity Sai Inflationfocused | Mesirow Financial vs. Short Duration Inflation |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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