Correlation Between Mesirow Financial and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Emerging Markets 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 Emerging Markets 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 Emerging Markets Equity, you can compare the effects of market volatilities on Mesirow Financial and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Emerging Markets.
Diversification Opportunities for Mesirow Financial and Emerging Markets
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mesirow and Emerging is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Emerging Markets Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Equity has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Emerging Markets go up and down completely randomly.
Pair Corralation between Mesirow Financial and Emerging Markets
Assuming the 90 days horizon Mesirow Financial Small is expected to generate 0.98 times more return on investment than Emerging Markets. However, Mesirow Financial Small is 1.02 times less risky than Emerging Markets. It trades about 0.34 of its potential returns per unit of risk. Emerging Markets Equity is currently generating about 0.2 per unit of risk. If you would invest 1,245 in Mesirow Financial Small on November 2, 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 | 95.0% |
| Values | Daily Returns |
Mesirow Financial Small vs. Emerging Markets Equity
Performance |
| Timeline |
| Mesirow Financial Small |
| Emerging Markets Equity |
Mesirow Financial and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Emerging Markets
The main advantage of trading using opposite Mesirow Financial and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Mesirow Financial vs. Mesirow Financial Small | Mesirow Financial vs. Mesirow Enhanced Core | Mesirow Financial vs. Mesirow Financial High | Mesirow Financial vs. Mesirow Financial High |
| Emerging Markets vs. Hsbc Treasury Money | Emerging Markets vs. Blackrock Exchange Portfolio | Emerging Markets vs. Cref Money Market | Emerging Markets vs. Chestnut Street Exchange |
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.
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