Correlation Between Mesirow Financial and American Beacon
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and American Beacon 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 American Beacon 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 American Beacon Funds, you can compare the effects of market volatilities on Mesirow Financial and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and American Beacon.
Diversification Opportunities for Mesirow Financial and American Beacon
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mesirow and American is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and American Beacon Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Funds 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Funds has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and American Beacon go up and down completely randomly.
Pair Corralation between Mesirow Financial and American Beacon
Assuming the 90 days horizon Mesirow Financial is expected to generate 3.66 times less return on investment than American Beacon. In addition to that, Mesirow Financial is 6.77 times more volatile than American Beacon Funds. It trades about 0.02 of its total potential returns per unit of risk. American Beacon Funds is currently generating about 0.38 per unit of volatility. If you would invest 853.00 in American Beacon Funds on September 13, 2024 and sell it today you would earn a total of 9.00 from holding American Beacon Funds or generate 1.06% 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. American Beacon Funds
Performance |
| Timeline |
| Mesirow Financial Small |
| American Beacon Funds |
Mesirow Financial and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and American Beacon
The main advantage of trading using opposite Mesirow Financial and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon'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 |
| American Beacon vs. Tortoise Energy Independence | American Beacon vs. World Energy Fund | American Beacon vs. Clearbridge Energy Mlp | American Beacon vs. Oil Gas Ultrasector |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |