Correlation Between Mesirow Financial and Baron Select
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Baron Select 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 Baron Select 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 Baron Select Funds, you can compare the effects of market volatilities on Mesirow Financial and Baron Select 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 Baron Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Baron Select.
Diversification Opportunities for Mesirow Financial and Baron Select
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MESIROW and Baron is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Baron Select Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Select Funds 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 Baron Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Select Funds has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Baron Select go up and down completely randomly.
Pair Corralation between Mesirow Financial and Baron Select
Assuming the 90 days horizon Mesirow Financial is expected to generate 1.86 times less return on investment than Baron Select. But when comparing it to its historical volatility, Mesirow Financial Small is 1.24 times less risky than Baron Select. It trades about 0.08 of its potential returns per unit of risk. Baron Select Funds is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 859.00 in Baron Select Funds on September 2, 2024 and sell it today you would earn a total of 454.00 from holding Baron Select Funds or generate 52.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesirow Financial Small vs. Baron Select Funds
Performance |
| Timeline |
| Mesirow Financial Small |
| Baron Select Funds |
Mesirow Financial and Baron Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Baron Select
The main advantage of trading using opposite Mesirow Financial and Baron Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Baron Select 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 Baron Select will offset losses from the drop in Baron Select's long position.| Mesirow Financial vs. Semiconductor Ultrasector Profund | Mesirow Financial vs. Commonwealth Global Fund | Mesirow Financial vs. Growth Opportunities Fund | Mesirow Financial vs. Ab Value Fund |
| Baron Select vs. Alger Health Sciences | Baron Select vs. Prudential Health Sciences | Baron Select vs. Live Oak Health | Baron Select vs. Delaware Healthcare Fund |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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