Correlation Between Mesirow Financial and International Investors
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and International Investors 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 International Investors 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 International Investors Gold, you can compare the effects of market volatilities on Mesirow Financial and International Investors 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 International Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and International Investors.
Diversification Opportunities for Mesirow Financial and International Investors
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mesirow and International is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and International Investors Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Investors 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 International Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Investors has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and International Investors go up and down completely randomly.
Pair Corralation between Mesirow Financial and International Investors
Assuming the 90 days horizon Mesirow Financial Small is expected to under-perform the International Investors. In addition to that, Mesirow Financial is 1.3 times more volatile than International Investors Gold. It trades about -0.23 of its total potential returns per unit of risk. International Investors Gold is currently generating about -0.07 per unit of volatility. If you would invest 914.00 in International Investors Gold on October 11, 2024 and sell it today you would lose (28.00) from holding International Investors Gold or give up 3.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesirow Financial Small vs. International Investors Gold
Performance |
| Timeline |
| Mesirow Financial Small |
| International Investors |
Mesirow Financial and International Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and International Investors
The main advantage of trading using opposite Mesirow Financial and International Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, International Investors 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 International Investors will offset losses from the drop in International Investors' long position.| Mesirow Financial vs. Origin Emerging Markets | Mesirow Financial vs. Dws Emerging Markets | Mesirow Financial vs. Black Oak Emerging | Mesirow Financial vs. Ashmore Emerging Markets |
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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