Correlation Between Mesirow Financial and Nationwide Core
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Nationwide Core 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 Nationwide Core 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 Nationwide E Plus, you can compare the effects of market volatilities on Mesirow Financial and Nationwide Core 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 Nationwide Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Nationwide Core.
Diversification Opportunities for Mesirow Financial and Nationwide Core
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mesirow and Nationwide is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Nationwide E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide E Plus 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 Nationwide Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide E Plus has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Nationwide Core go up and down completely randomly.
Pair Corralation between Mesirow Financial and Nationwide Core
Assuming the 90 days horizon Mesirow Financial Small is expected to generate 2.03 times more return on investment than Nationwide Core. However, Mesirow Financial is 2.03 times more volatile than Nationwide E Plus. It trades about 0.18 of its potential returns per unit of risk. Nationwide E Plus is currently generating about 0.27 per unit of risk. If you would invest 1,260 in Mesirow Financial Small on October 25, 2024 and sell it today you would earn a total of 35.00 from holding Mesirow Financial Small or generate 2.78% 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. Nationwide E Plus
Performance |
| Timeline |
| Mesirow Financial Small |
| Nationwide E Plus |
Mesirow Financial and Nationwide Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Nationwide Core
The main advantage of trading using opposite Mesirow Financial and Nationwide Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Nationwide Core 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 Nationwide Core will offset losses from the drop in Nationwide Core's long position.| Mesirow Financial vs. Franklin Government Money | Mesirow Financial vs. Dws Government Money | Mesirow Financial vs. Old Westbury Municipal | Mesirow Financial vs. Pace Municipal Fixed |
| Nationwide Core vs. Smallcap Fund Fka | Nationwide Core vs. Df Dent Small | Nationwide Core vs. Rbc Small Cap | Nationwide Core vs. Kinetics Small Cap |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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