Correlation Between Multi Manager and Mesirow Financial
Can any of the company-specific risk be diversified away by investing in both Multi Manager and Mesirow Financial 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 Multi Manager and Mesirow Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Manager High Yield and Mesirow Financial High, you can compare the effects of market volatilities on Multi Manager and Mesirow Financial 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 Multi Manager with a short position of Mesirow Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Manager and Mesirow Financial.
Diversification Opportunities for Multi Manager and Mesirow Financial
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multi and Mesirow is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager High Yield and Mesirow Financial High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesirow Financial High and Multi Manager 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 Multi Manager High Yield are associated (or correlated) with Mesirow Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesirow Financial High has no effect on the direction of Multi Manager i.e., Multi Manager and Mesirow Financial go up and down completely randomly.
Pair Corralation between Multi Manager and Mesirow Financial
Assuming the 90 days horizon Multi Manager is expected to generate 1.27 times less return on investment than Mesirow Financial. But when comparing it to its historical volatility, Multi Manager High Yield is 1.02 times less risky than Mesirow Financial. It trades about 0.2 of its potential returns per unit of risk. Mesirow Financial High is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 781.00 in Mesirow Financial High on September 3, 2024 and sell it today you would earn a total of 75.00 from holding Mesirow Financial High or generate 9.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Manager High Yield vs. Mesirow Financial High
Performance |
| Timeline |
| Multi Manager High |
| Mesirow Financial High |
Multi Manager and Mesirow Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Manager and Mesirow Financial
The main advantage of trading using opposite Multi Manager and Mesirow Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Manager position performs unexpectedly, Mesirow Financial 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 Mesirow Financial will offset losses from the drop in Mesirow Financial's long position.| Multi Manager vs. Intermediate Term Tax Free Bond | Multi Manager vs. Federated Pennsylvania Municipal | Multi Manager vs. Ishares Municipal Bond | Multi Manager vs. Morningstar Municipal Bond |
| Mesirow Financial vs. Kinetics Market Opportunities | Mesirow Financial vs. Calamos Market Neutral | Mesirow Financial vs. Locorr Market Trend | Mesirow Financial vs. Morgan Stanley Emerging |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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