Correlation Between Mesirow Financial and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Angel Oak 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 Angel Oak 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 Angel Oak Ultrashort, you can compare the effects of market volatilities on Mesirow Financial and Angel Oak 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 Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Angel Oak.
Diversification Opportunities for Mesirow Financial and Angel Oak
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mesirow and Angel is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Angel Oak Ultrashort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Ultrashort 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 Angel Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel Oak Ultrashort has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Angel Oak go up and down completely randomly.
Pair Corralation between Mesirow Financial and Angel Oak
Assuming the 90 days horizon Mesirow Financial Small is expected to generate 12.04 times more return on investment than Angel Oak. However, Mesirow Financial is 12.04 times more volatile than Angel Oak Ultrashort. It trades about 0.09 of its potential returns per unit of risk. Angel Oak Ultrashort is currently generating about 0.22 per unit of risk. If you would invest 1,266 in Mesirow Financial Small on September 3, 2024 and sell it today you would earn a total of 178.00 from holding Mesirow Financial Small or generate 14.06% 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. Angel Oak Ultrashort
Performance |
| Timeline |
| Mesirow Financial Small |
| Angel Oak Ultrashort |
Mesirow Financial and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Angel Oak
The main advantage of trading using opposite Mesirow Financial and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Angel Oak 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 Angel Oak will offset losses from the drop in Angel Oak's long position.| Mesirow Financial vs. Vanguard Small Cap Index | Mesirow Financial vs. Vanguard Small Cap Index | Mesirow Financial vs. Vanguard Small Cap Index | Mesirow Financial vs. Vanguard Small Cap Index |
| Angel Oak vs. Icon Financial Fund | Angel Oak vs. Blackrock Financial Institutions | Angel Oak vs. Mesirow Financial Small | Angel Oak vs. Goldman Sachs Financial |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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