Correlation Between Mesirow Financial and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Ashmore Emerging 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 Ashmore Emerging 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 Ashmore Emerging Markets, you can compare the effects of market volatilities on Mesirow Financial and Ashmore Emerging 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 Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Ashmore Emerging.
Diversification Opportunities for Mesirow Financial and Ashmore Emerging
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mesirow and Ashmore is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Ashmore Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Emerging Markets 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 Ashmore Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Emerging Markets has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Mesirow Financial and Ashmore Emerging
Assuming the 90 days horizon Mesirow Financial Small is expected to generate 5.08 times more return on investment than Ashmore Emerging. However, Mesirow Financial is 5.08 times more volatile than Ashmore Emerging Markets. It trades about 0.1 of its potential returns per unit of risk. Ashmore Emerging Markets 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 | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Mesirow Financial Small vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Mesirow Financial Small |
| Ashmore Emerging Markets |
Mesirow Financial and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Ashmore Emerging
The main advantage of trading using opposite Mesirow Financial and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Ashmore Emerging 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 Ashmore Emerging will offset losses from the drop in Ashmore Emerging'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 |
| Ashmore Emerging vs. Financial Industries Fund | Ashmore Emerging vs. Mesirow Financial Small | Ashmore Emerging vs. T Rowe Price | Ashmore Emerging vs. Transamerica Funds |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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