Correlation Between Mesirow Financial and Meridian Equity
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Meridian Equity 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 Meridian Equity 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 Meridian Equity Income, you can compare the effects of market volatilities on Mesirow Financial and Meridian Equity 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 Meridian Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Meridian Equity.
Diversification Opportunities for Mesirow Financial and Meridian Equity
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mesirow and Meridian is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Meridian Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Equity Income 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 Meridian Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Equity Income has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Meridian Equity go up and down completely randomly.
Pair Corralation between Mesirow Financial and Meridian Equity
Assuming the 90 days horizon Mesirow Financial is expected to generate 1.05 times less return on investment than Meridian Equity. In addition to that, Mesirow Financial is 1.91 times more volatile than Meridian Equity Income. It trades about 0.05 of its total potential returns per unit of risk. Meridian Equity Income is currently generating about 0.09 per unit of volatility. If you would invest 1,178 in Meridian Equity Income on August 26, 2024 and sell it today you would earn a total of 235.00 from holding Meridian Equity Income or generate 19.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesirow Financial Small vs. Meridian Equity Income
Performance |
| Timeline |
| Mesirow Financial Small |
| Meridian Equity Income |
Mesirow Financial and Meridian Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Meridian Equity
The main advantage of trading using opposite Mesirow Financial and Meridian Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Meridian Equity 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 Meridian Equity will offset losses from the drop in Meridian Equity's long position.| Mesirow Financial vs. Legg Mason Bw | Mesirow Financial vs. Nuveen Winslow Large Cap | Mesirow Financial vs. Pace Large Growth | Mesirow Financial vs. Gmo Equity Allocation |
| Meridian Equity vs. Meridian Equity Income | Meridian Equity vs. Meridian Growth Fund | Meridian Equity vs. Meridian Growth Fund | Meridian Equity vs. Meridian Equity Income |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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