Correlation Between Mesirow Financial and Aberdeen Japan
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Aberdeen Japan 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 Aberdeen Japan 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 Aberdeen Japan Equity, you can compare the effects of market volatilities on Mesirow Financial and Aberdeen Japan 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 Aberdeen Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Aberdeen Japan.
Diversification Opportunities for Mesirow Financial and Aberdeen Japan
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mesirow and Aberdeen is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Aberdeen Japan Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Japan 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 Aberdeen Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Japan Equity has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Aberdeen Japan go up and down completely randomly.
Pair Corralation between Mesirow Financial and Aberdeen Japan
Assuming the 90 days horizon Mesirow Financial Small is expected to generate 0.8 times more return on investment than Aberdeen Japan. However, Mesirow Financial Small is 1.24 times less risky than Aberdeen Japan. It trades about 0.33 of its potential returns per unit of risk. Aberdeen Japan Equity is currently generating about 0.11 per unit of risk. If you would invest 1,245 in Mesirow Financial Small on November 1, 2024 and sell it today you would earn a total of 67.00 from holding Mesirow Financial Small or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesirow Financial Small vs. Aberdeen Japan Equity
Performance |
| Timeline |
| Mesirow Financial Small |
| Aberdeen Japan Equity |
Mesirow Financial and Aberdeen Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Aberdeen Japan
The main advantage of trading using opposite Mesirow Financial and Aberdeen Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Aberdeen Japan 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 Aberdeen Japan will offset losses from the drop in Aberdeen Japan's long position.| Mesirow Financial vs. Putnam Convertible Securities | Mesirow Financial vs. Gabelli Convertible And | Mesirow Financial vs. Calamos Dynamic Convertible | Mesirow Financial vs. Columbia Convertible Securities |
| Aberdeen Japan vs. Fulcrum Diversified Absolute | Aberdeen Japan vs. The Gabelli Small | Aberdeen Japan vs. Davenport Small Cap | Aberdeen Japan vs. Stone Ridge Diversified |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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