Correlation Between Mesirow Financial and The Arbitrage
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and The Arbitrage 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 The Arbitrage 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 The Arbitrage Fund, you can compare the effects of market volatilities on Mesirow Financial and The Arbitrage 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 The Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and The Arbitrage.
Diversification Opportunities for Mesirow Financial and The Arbitrage
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mesirow and The is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and The Arbitrage Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Arbitrage 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 The Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Arbitrage has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and The Arbitrage go up and down completely randomly.
Pair Corralation between Mesirow Financial and The Arbitrage
Assuming the 90 days horizon Mesirow Financial Small is expected to generate 5.16 times more return on investment than The Arbitrage. However, Mesirow Financial is 5.16 times more volatile than The Arbitrage Fund. It trades about 0.02 of its potential returns per unit of risk. The Arbitrage Fund is currently generating about 0.07 per unit of risk. If you would invest 1,125 in Mesirow Financial Small on November 27, 2024 and sell it today you would earn a total of 107.00 from holding Mesirow Financial Small or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesirow Financial Small vs. The Arbitrage Fund
Performance |
| Timeline |
| Mesirow Financial Small |
| The Arbitrage |
Mesirow Financial and The Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and The Arbitrage
The main advantage of trading using opposite Mesirow Financial and The Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, The Arbitrage 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 The Arbitrage will offset losses from the drop in The Arbitrage's long position.| Mesirow Financial vs. Credit Suisse Multialternative | Mesirow Financial vs. Small Pany Growth | Mesirow Financial vs. Glg Intl Small | Mesirow Financial vs. Versatile Bond Portfolio |
| The Arbitrage vs. Delaware Limited Term Diversified | The Arbitrage vs. Lord Abbett Diversified | The Arbitrage vs. Aqr Diversified Arbitrage | The Arbitrage vs. Stone Ridge Diversified |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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