Correlation Between Mesirow Financial and Icon Financial

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

Diversification Opportunities for Mesirow Financial and Icon Financial

0.75

Correlation Coefficient

Mesirow Financial  Icon Financial

Poor diversification

The 3 months correlation between Mesirow and Icon is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial 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 Icon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Financial has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Icon Financial go up and down completely randomly.

Pair Corralation between Mesirow Financial and Icon Financial

Assuming the 90 days horizon Mesirow Financial is expected to generate 20.93 times less return on investment than Icon Financial. But when comparing it to its historical volatility, Mesirow Financial Small is 1.67 times less risky than Icon Financial. It trades about 0.01 of its potential returns per unit of risk. Icon Financial Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  794.00  in Icon Financial Fund on September 18, 2025 and sell it today you would earn a total of  114.00  from holding Icon Financial Fund or generate 14.36% return on investment over 90 days.

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

Mesirow Financial Small  vs.  Icon Financial Fund

Mesirow Financial Small

Risk-Adjusted Performance

Weakest

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.

Icon Financial

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Financial Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Icon Financial showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mesirow Financial and Icon Financial

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

The idea behind Mesirow Financial Small and Icon Financial Fund 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.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.