Correlation Between Mesirow Financial and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Mesirow Financial and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Dow Jones.
Diversification Opportunities for Mesirow Financial and Dow Jones
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mesirow and Dow is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Dow Jones go up and down completely randomly.
Pair Corralation between Mesirow Financial and Dow Jones
Assuming the 90 days horizon Mesirow Financial is expected to generate 1.01 times less return on investment than Dow Jones. In addition to that, Mesirow Financial is 1.35 times more volatile than Dow Jones Industrial. It trades about 0.2 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.27 per unit of volatility. If you would invest 4,223,305 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 248,901 from holding Dow Jones Industrial or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesirow Financial Small vs. Dow Jones Industrial
Performance |
| Timeline |
Mesirow Financial and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Mesirow Financial Small
Pair trading matchups for Mesirow Financial
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Mesirow Financial and Dow Jones
The main advantage of trading using opposite Mesirow Financial and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' 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 |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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