Correlation Between Mesirow Financial and Invesco International

Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Invesco International 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 Invesco International 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 Invesco International Diversified, you can compare the effects of market volatilities on Mesirow Financial and Invesco International 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 Invesco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Invesco International.

Diversification Opportunities for Mesirow Financial and Invesco International

0.58

Correlation Coefficient

Mesirow Financial  Invesco International

Very weak diversification

The 3 months correlation between Mesirow and Invesco is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Invesco International Diversif in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco International 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 Invesco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco International has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Invesco International go up and down completely randomly.

Pair Corralation between Mesirow Financial and Invesco International

Assuming the 90 days horizon Mesirow Financial Small is expected to under-perform the Invesco International. In addition to that, Mesirow Financial is 1.82 times more volatile than Invesco International Diversified. It trades about -0.23 of its total potential returns per unit of risk. Invesco International Diversified is currently generating about -0.36 per unit of volatility. If you would invest  1,672  in Invesco International Diversified on October 8, 2024 and sell it today you would lose (155.00) from holding Invesco International Diversified or give up 9.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Mesirow Financial Small  vs.  Invesco International Diversif

Mesirow Financial Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mesirow Financial Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Mesirow Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Invesco International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco International Diversified has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Mesirow Financial and Invesco International

The main advantage of trading using opposite Mesirow Financial and Invesco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Invesco International 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 Invesco International will offset losses from the drop in Invesco International's long position.

The idea behind Mesirow Financial Small and Invesco International Diversified pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.