Correlation Between Mesirow Financial and Valic Company
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Valic Company 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 Valic Company 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 Valic Company I, you can compare the effects of market volatilities on Mesirow Financial and Valic Company 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 Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Valic Company.
Diversification Opportunities for Mesirow Financial and Valic Company
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mesirow and Valic is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I 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 Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Valic Company go up and down completely randomly.
Pair Corralation between Mesirow Financial and Valic Company
Assuming the 90 days horizon Mesirow Financial is expected to generate 1.15 times less return on investment than Valic Company. In addition to that, Mesirow Financial is 1.78 times more volatile than Valic Company I. It trades about 0.05 of its total potential returns per unit of risk. Valic Company I is currently generating about 0.09 per unit of volatility. If you would invest 866.00 in Valic Company I on September 4, 2024 and sell it today you would earn a total of 289.00 from holding Valic Company I or generate 33.37% 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. Valic Company I
Performance |
| Timeline |
| Mesirow Financial Small |
| Valic Company I |
Mesirow Financial and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesirow Financial and Valic Company
The main advantage of trading using opposite Mesirow Financial and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Valic Company 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 Valic Company will offset losses from the drop in Valic Company's long position.| Mesirow Financial vs. Ab Global Real | Mesirow Financial vs. Nationwide Global Equity | Mesirow Financial vs. Alliancebernstein Global High | Mesirow Financial vs. Commonwealth Global Fund |
| Valic Company vs. Jhancock Diversified Macro | Valic Company vs. Oppenheimer International Diversified | Valic Company vs. Adams Diversified Equity | Valic Company vs. Aqr Diversified Arbitrage |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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