Correlation Between Mesirow Financial and Aristotle/saul Global
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Aristotle/saul Global 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 Aristotle/saul Global 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 Aristotlesaul Global Eq, you can compare the effects of market volatilities on Mesirow Financial and Aristotle/saul Global 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 Aristotle/saul Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Aristotle/saul Global.
Diversification Opportunities for Mesirow Financial and Aristotle/saul Global
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mesirow and Aristotle/saul is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Aristotlesaul Global Eq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle/saul Global 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 Aristotle/saul Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle/saul Global has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Aristotle/saul Global go up and down completely randomly.
Pair Corralation between Mesirow Financial and Aristotle/saul Global
Assuming the 90 days horizon Mesirow Financial Small is expected to generate 1.58 times more return on investment than Aristotle/saul Global. However, Mesirow Financial is 1.58 times more volatile than Aristotlesaul Global Eq. It trades about 0.05 of its potential returns per unit of risk. Aristotlesaul Global Eq is currently generating about 0.07 per unit of risk. If you would invest 1,132 in Mesirow Financial Small on August 30, 2024 and sell it today you would earn a total of 310.00 from holding Mesirow Financial Small or generate 27.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 44.44% |
| Values | Daily Returns |
Mesirow Financial Small vs. Aristotlesaul Global Eq
Performance |
| Timeline |
| Mesirow Financial Small |
| Aristotle/saul Global |
Mesirow Financial and Aristotle/saul Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Aristotle/saul Global
The main advantage of trading using opposite Mesirow Financial and Aristotle/saul Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Aristotle/saul Global 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 Aristotle/saul Global will offset losses from the drop in Aristotle/saul Global's long position.| Mesirow Financial vs. Vanguard Small Cap Index | Mesirow Financial vs. T Rowe Price | Mesirow Financial vs. HUMANA INC | Mesirow Financial vs. Aquagold International |
| Aristotle/saul Global vs. T Rowe Price | Aristotle/saul Global vs. Vanguard Financials Index | Aristotle/saul Global vs. Goldman Sachs Trust | Aristotle/saul Global vs. Mesirow Financial Small |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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