Correlation Between Mesirow Financial and Calvert Emerging

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

Diversification Opportunities for Mesirow Financial and Calvert Emerging

0.29

Correlation Coefficient

Mesirow Financial  Calvert Emerging

Modest diversification

The 3 months correlation between Mesirow and Calvert is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Calvert Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Emerging Markets 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 Calvert Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Emerging Markets has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Calvert Emerging go up and down completely randomly.

Pair Corralation between Mesirow Financial and Calvert Emerging

Assuming the 90 days horizon Mesirow Financial Small is expected to under-perform the Calvert Emerging. In addition to that, Mesirow Financial is 1.67 times more volatile than Calvert Emerging Markets. It trades about -0.03 of its total potential returns per unit of risk. Calvert Emerging Markets is currently generating about 0.09 per unit of volatility. If you would invest  1,115  in Calvert Emerging Markets on February 19, 2025 and sell it today you would earn a total of  79.00  from holding Calvert Emerging Markets or generate 7.09% return on investment over 90 days.

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

Mesirow Financial Small  vs.  Calvert Emerging Markets

Mesirow Financial Small

Risk-Adjusted Performance

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.

Calvert Emerging Markets

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Emerging Markets are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Calvert Emerging may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Pair Trading with Mesirow Financial and Calvert Emerging

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

The idea behind Mesirow Financial Small and Calvert Emerging Markets 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.