Correlation Between Mesirow Financial and Cref Money
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Cref Money 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 Cref Money 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 Cref Money Market, you can compare the effects of market volatilities on Mesirow Financial and Cref Money 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 Cref Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Cref Money.
Diversification Opportunities for Mesirow Financial and Cref Money
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mesirow and Cref is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Cref Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Money Market 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 Cref Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Money Market has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Cref Money go up and down completely randomly.
Pair Corralation between Mesirow Financial and Cref Money
Assuming the 90 days horizon Mesirow Financial is expected to generate 1.28 times less return on investment than Cref Money. In addition to that, Mesirow Financial is 51.47 times more volatile than Cref Money Market. It trades about 0.02 of its total potential returns per unit of risk. Cref Money Market is currently generating about 1.02 per unit of volatility. If you would invest 2,965 in Cref Money Market on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Cref Money Market or generate 0.37% 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. Cref Money Market
Performance |
| Timeline |
| Mesirow Financial Small |
| Cref Money Market |
Mesirow Financial and Cref Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Cref Money
The main advantage of trading using opposite Mesirow Financial and Cref Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Cref Money 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 Cref Money will offset losses from the drop in Cref Money's long position.| Mesirow Financial vs. Old Westbury Large | Mesirow Financial vs. Aqr Large Cap | Mesirow Financial vs. Morningstar Unconstrained Allocation | Mesirow Financial vs. T Rowe Price |
| Cref Money vs. Davis Financial Fund | Cref Money vs. Blackrock Financial Institutions | Cref Money vs. Transamerica Financial Life | Cref Money vs. Mesirow Financial Small |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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