Correlation Between Mesirow Financial and Cutler Equity
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Cutler Equity 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 Cutler Equity 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 Cutler Equity, you can compare the effects of market volatilities on Mesirow Financial and Cutler Equity 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 Cutler Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Cutler Equity.
Diversification Opportunities for Mesirow Financial and Cutler Equity
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mesirow and Cutler is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Cutler Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cutler Equity 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 Cutler Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cutler Equity has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Cutler Equity go up and down completely randomly.
Pair Corralation between Mesirow Financial and Cutler Equity
Assuming the 90 days horizon Mesirow Financial Small is expected to generate 1.66 times more return on investment than Cutler Equity. However, Mesirow Financial is 1.66 times more volatile than Cutler Equity. It trades about 0.1 of its potential returns per unit of risk. Cutler Equity is currently generating about 0.11 per unit of risk. If you would invest 1,379 in Mesirow Financial Small on August 29, 2024 and sell it today you would earn a total of 62.00 from holding Mesirow Financial Small or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Mesirow Financial Small vs. Cutler Equity
Performance |
| Timeline |
| Mesirow Financial Small |
| Cutler Equity |
Mesirow Financial and Cutler Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Cutler Equity
The main advantage of trading using opposite Mesirow Financial and Cutler Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Cutler Equity 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 Cutler Equity will offset losses from the drop in Cutler Equity'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 |
| Cutler Equity vs. 1919 Financial Services | Cutler Equity vs. Mesirow Financial Small | Cutler Equity vs. Vanguard Financials Index | Cutler Equity vs. Gabelli Global 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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