Correlation Between American Beacon and Mesirow Financial
Can any of the company-specific risk be diversified away by investing in both American Beacon 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 American Beacon and Mesirow Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Funds and Mesirow Financial High, you can compare the effects of market volatilities on American Beacon 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 American Beacon with a short position of Mesirow Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Mesirow Financial.
Diversification Opportunities for American Beacon and Mesirow Financial
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Mesirow is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Funds 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 American Beacon 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 American Beacon Funds 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 American Beacon i.e., American Beacon and Mesirow Financial go up and down completely randomly.
Pair Corralation between American Beacon and Mesirow Financial
Assuming the 90 days horizon American Beacon is expected to generate 1.3 times less return on investment than Mesirow Financial. In addition to that, American Beacon is 1.33 times more volatile than Mesirow Financial High. It trades about 0.13 of its total potential returns per unit of risk. Mesirow Financial High is currently generating about 0.22 per unit of volatility. If you would invest 704.00 in Mesirow Financial High on September 3, 2024 and sell it today you would earn a total of 153.00 from holding Mesirow Financial High or generate 21.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Funds vs. Mesirow Financial High
Performance |
| Timeline |
| American Beacon Funds |
| Mesirow Financial High |
American Beacon and Mesirow Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Mesirow Financial
The main advantage of trading using opposite American Beacon and Mesirow Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon 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.| American Beacon vs. Lord Abbett Convertible | American Beacon vs. Rationalpier 88 Convertible | American Beacon vs. Rationalpier 88 Convertible | American Beacon vs. Fidelity Sai Convertible |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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