Correlation Between Mesirow Financial and Scharf Global
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Scharf Global 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 Scharf Global 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 Scharf Global Opportunity, you can compare the effects of market volatilities on Mesirow Financial and Scharf Global 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 Scharf Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Scharf Global.
Diversification Opportunities for Mesirow Financial and Scharf Global
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mesirow and Scharf is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Scharf Global Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Global Opportunity 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 Scharf Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Global Opportunity has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Scharf Global go up and down completely randomly.
Pair Corralation between Mesirow Financial and Scharf Global
Assuming the 90 days horizon Mesirow Financial Small is expected to generate 2.2 times more return on investment than Scharf Global. However, Mesirow Financial is 2.2 times more volatile than Scharf Global Opportunity. It trades about 0.21 of its potential returns per unit of risk. Scharf Global Opportunity is currently generating about 0.37 per unit of risk. If you would invest 1,364 in Mesirow Financial Small on September 4, 2024 and sell it today you would earn a total of 77.00 from holding Mesirow Financial Small or generate 5.65% 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. Scharf Global Opportunity
Performance |
| Timeline |
| Mesirow Financial Small |
| Scharf Global Opportunity |
Mesirow Financial and Scharf Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Scharf Global
The main advantage of trading using opposite Mesirow Financial and Scharf Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Scharf Global 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 Scharf Global will offset losses from the drop in Scharf Global's long position.| Mesirow Financial vs. Ab Global Risk | Mesirow Financial vs. Guggenheim High Yield | Mesirow Financial vs. Siit High Yield | Mesirow Financial vs. Pioneer High Yield |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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