Correlation Between Mesirow Financial and The Chesapeake
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and The Chesapeake 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 The Chesapeake 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 The Chesapeake Growth, you can compare the effects of market volatilities on Mesirow Financial and The Chesapeake 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 The Chesapeake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and The Chesapeake.
Diversification Opportunities for Mesirow Financial and The Chesapeake
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mesirow and The is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and The Chesapeake Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Growth 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 The Chesapeake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Growth has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and The Chesapeake go up and down completely randomly.
Pair Corralation between Mesirow Financial and The Chesapeake
Assuming the 90 days horizon Mesirow Financial Small is expected to generate 1.37 times more return on investment than The Chesapeake. However, Mesirow Financial is 1.37 times more volatile than The Chesapeake Growth. It trades about 0.09 of its potential returns per unit of risk. The Chesapeake Growth is currently generating about 0.07 per unit of risk. If you would invest 1,268 in Mesirow Financial Small on August 29, 2024 and sell it today you would earn a total of 174.00 from holding Mesirow Financial Small or generate 13.72% 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. The Chesapeake Growth
Performance |
| Timeline |
| Mesirow Financial Small |
| Chesapeake Growth |
Mesirow Financial and The Chesapeake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and The Chesapeake
The main advantage of trading using opposite Mesirow Financial and The Chesapeake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, The Chesapeake 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 The Chesapeake will offset losses from the drop in The Chesapeake's long position.| Mesirow Financial vs. Bbh Limited Duration | Mesirow Financial vs. Fa 529 Aggressive | Mesirow Financial vs. Abr 7525 Volatility | Mesirow Financial vs. Balanced Fund Investor |
| The Chesapeake vs. Emerald Growth Fund | The Chesapeake vs. Victory Rs Partners | The Chesapeake vs. Hotchkis Wiley Large | The Chesapeake vs. Chase Growth Fund |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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