Correlation Between Mesirow Financial and Ftfa Franklin
Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Ftfa Franklin 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 Ftfa Franklin 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 Ftfa Franklin Templeton Growth, you can compare the effects of market volatilities on Mesirow Financial and Ftfa Franklin 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 Ftfa Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Ftfa Franklin.
Diversification Opportunities for Mesirow Financial and Ftfa Franklin
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mesirow and Ftfa is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Ftfa Franklin Templeton Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ftfa Franklin Templeton 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 Ftfa Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ftfa Franklin Templeton has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Ftfa Franklin go up and down completely randomly.
Pair Corralation between Mesirow Financial and Ftfa Franklin
Assuming the 90 days horizon Mesirow Financial Small is expected to under-perform the Ftfa Franklin. In addition to that, Mesirow Financial is 3.68 times more volatile than Ftfa Franklin Templeton Growth. It trades about -0.26 of its total potential returns per unit of risk. Ftfa Franklin Templeton Growth is currently generating about -0.04 per unit of volatility. If you would invest 2,107 in Ftfa Franklin Templeton Growth on September 26, 2024 and sell it today you would lose (12.00) from holding Ftfa Franklin Templeton Growth or give up 0.57% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Mesirow Financial Small vs. Ftfa Franklin Templeton Growth
Performance |
Timeline |
Mesirow Financial Small |
Ftfa Franklin Templeton |
Mesirow Financial and Ftfa Franklin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mesirow Financial and Ftfa Franklin
The main advantage of trading using opposite Mesirow Financial and Ftfa Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Ftfa Franklin 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 Ftfa Franklin will offset losses from the drop in Ftfa Franklin's long position.Mesirow Financial vs. Mesirow Financial Small | Mesirow Financial vs. Mesirow Enhanced Core | Mesirow Financial vs. Mesirow Financial High | Mesirow Financial vs. Mesirow Financial High |
Ftfa Franklin vs. Icon Financial Fund | Ftfa Franklin vs. Gabelli Global Financial | Ftfa Franklin vs. Goldman Sachs Financial | Ftfa Franklin vs. Angel Oak Financial |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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