Correlation Between Mesirow Financial and Hennessy Gas
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Hennessy Gas 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 Hennessy Gas 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 Hennessy Gas Utility, you can compare the effects of market volatilities on Mesirow Financial and Hennessy Gas 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 Hennessy Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Hennessy Gas.
Diversification Opportunities for Mesirow Financial and Hennessy Gas
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mesirow and Hennessy is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Hennessy Gas Utility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Gas Utility 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 Hennessy Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Gas Utility has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Hennessy Gas go up and down completely randomly.
Pair Corralation between Mesirow Financial and Hennessy Gas
Assuming the 90 days horizon Mesirow Financial Small is expected to generate 1.24 times more return on investment than Hennessy Gas. However, Mesirow Financial is 1.24 times more volatile than Hennessy Gas Utility. It trades about 0.05 of its potential returns per unit of risk. Hennessy Gas Utility is currently generating about 0.04 per unit of risk. If you would invest 1,085 in Mesirow Financial Small on September 12, 2024 and sell it today you would earn a total of 338.00 from holding Mesirow Financial Small or generate 31.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Mesirow Financial Small vs. Hennessy Gas Utility
Performance |
| Timeline |
| Mesirow Financial Small |
| Hennessy Gas Utility |
Mesirow Financial and Hennessy Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Hennessy Gas
The main advantage of trading using opposite Mesirow Financial and Hennessy Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Hennessy Gas 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 Hennessy Gas will offset losses from the drop in Hennessy Gas' long position.| Mesirow Financial vs. T Rowe Price | Mesirow Financial vs. Scharf Global Opportunity | Mesirow Financial vs. Rbb Fund | Mesirow Financial vs. Ab Value Fund |
| Hennessy Gas vs. Guggenheim Managed Futures | Hennessy Gas vs. Simt Multi Asset Inflation | Hennessy Gas vs. Short Duration Inflation | Hennessy Gas vs. Ab Bond Inflation |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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