Correlation Between Mesirow Financial and Ab Sustainable
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Ab Sustainable 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 Ab Sustainable 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 Ab Sustainable Thematic, you can compare the effects of market volatilities on Mesirow Financial and Ab Sustainable 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 Ab Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Ab Sustainable.
Diversification Opportunities for Mesirow Financial and Ab Sustainable
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mesirow and STHYX is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Ab Sustainable Thematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Sustainable Thematic 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 Ab Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Sustainable Thematic has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Ab Sustainable go up and down completely randomly.
Pair Corralation between Mesirow Financial and Ab Sustainable
Assuming the 90 days horizon Mesirow Financial Small is expected to generate 3.27 times more return on investment than Ab Sustainable. However, Mesirow Financial is 3.27 times more volatile than Ab Sustainable Thematic. It trades about 0.22 of its potential returns per unit of risk. Ab Sustainable Thematic is currently generating about 0.1 per unit of risk. If you would invest 1,364 in Mesirow Financial Small on September 3, 2024 and sell it today you would earn a total of 79.00 from holding Mesirow Financial Small or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesirow Financial Small vs. Ab Sustainable Thematic
Performance |
| Timeline |
| Mesirow Financial Small |
| Ab Sustainable Thematic |
Mesirow Financial and Ab Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Ab Sustainable
The main advantage of trading using opposite Mesirow Financial and Ab Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Ab Sustainable 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 Ab Sustainable will offset losses from the drop in Ab Sustainable's long position.| Mesirow Financial vs. Biotechnology Ultrasector Profund | Mesirow Financial vs. Janus Global Technology | Mesirow Financial vs. Technology Ultrasector Profund | Mesirow Financial vs. Pgim Jennison Technology |
| Ab Sustainable vs. Blackrock Sm Cap | Ab Sustainable vs. Davenport Small Cap | Ab Sustainable vs. Massmutual Premier Diversified | Ab Sustainable vs. Tax Managed Mid Small |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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