Correlation Between Mesirow Financial and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Lord Abbett 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 Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mesirow Financial Small and Lord Abbett Alpha, you can compare the effects of market volatilities on Mesirow Financial and Lord Abbett 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 Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Lord Abbett.
Diversification Opportunities for Mesirow Financial and Lord Abbett
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mesirow and Lord is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Lord Abbett Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Alpha 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 Small are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Alpha has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Lord Abbett go up and down completely randomly.
Pair Corralation between Mesirow Financial and Lord Abbett
Assuming the 90 days horizon Mesirow Financial is expected to generate 1.58 times less return on investment than Lord Abbett. In addition to that, Mesirow Financial is 1.18 times more volatile than Lord Abbett Alpha. It trades about 0.03 of its total potential returns per unit of risk. Lord Abbett Alpha is currently generating about 0.05 per unit of volatility. If you would invest 1,940 in Lord Abbett Alpha on September 25, 2024 and sell it today you would earn a total of 514.00 from holding Lord Abbett Alpha or generate 26.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesirow Financial Small vs. Lord Abbett Alpha
Performance |
| Timeline |
| Mesirow Financial Small |
| Lord Abbett Alpha |
Mesirow Financial and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Lord Abbett
The main advantage of trading using opposite Mesirow Financial and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Mesirow Financial vs. Ab Impact Municipal | Mesirow Financial vs. T Rowe Price | Mesirow Financial vs. Franklin High Yield | Mesirow Financial vs. Western Asset Municipal |
| Lord Abbett vs. Mesirow Financial Small | Lord Abbett vs. Gabelli Global Financial | Lord Abbett vs. Prudential Jennison Financial | Lord Abbett vs. Financials Ultrasector Profund |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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