Correlation Between Mesirow Financial and Blue Chip
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Blue Chip 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 Blue Chip 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 Blue Chip Growth, you can compare the effects of market volatilities on Mesirow Financial and Blue Chip 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 Blue Chip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Blue Chip.
Diversification Opportunities for Mesirow Financial and Blue Chip
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mesirow and Blue is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Blue Chip Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Chip Growth 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 Blue Chip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Chip Growth has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Blue Chip go up and down completely randomly.
Pair Corralation between Mesirow Financial and Blue Chip
Assuming the 90 days horizon Mesirow Financial is expected to generate 2.25 times less return on investment than Blue Chip. But when comparing it to its historical volatility, Mesirow Financial Small is 1.03 times less risky than Blue Chip. It trades about 0.05 of its potential returns per unit of risk. Blue Chip Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,307 in Blue Chip Growth on September 4, 2024 and sell it today you would earn a total of 2,389 from holding Blue Chip Growth or generate 72.24% 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. Blue Chip Growth
Performance |
| Timeline |
| Mesirow Financial Small |
| Blue Chip Growth |
Mesirow Financial and Blue Chip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Blue Chip
The main advantage of trading using opposite Mesirow Financial and Blue Chip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Blue Chip 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 Blue Chip will offset losses from the drop in Blue Chip's long position.| Mesirow Financial vs. Ab Global Risk | Mesirow Financial vs. Guggenheim High Yield | Mesirow Financial vs. Siit High Yield | Mesirow Financial vs. Pioneer High Yield |
| Blue Chip vs. Royce Global Financial | Blue Chip vs. Mesirow Financial Small | Blue Chip vs. 1919 Financial Services | Blue Chip vs. Transamerica Financial Life |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |