Correlation Between Mesirow Financial and Midcap Growth

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

Diversification Opportunities for Mesirow Financial and Midcap Growth

0.89

Correlation Coefficient

Mesirow Financial  Midcap Growth

Very poor diversification

The 3 months correlation between Mesirow and Midcap is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Midcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Growth 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 Midcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Growth has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Midcap Growth go up and down completely randomly.

Pair Corralation between Mesirow Financial and Midcap Growth

Assuming the 90 days horizon Mesirow Financial is expected to generate 1.86 times less return on investment than Midcap Growth. In addition to that, Mesirow Financial is 1.03 times more volatile than Midcap Growth Fund. It trades about 0.09 of its total potential returns per unit of risk. Midcap Growth Fund is currently generating about 0.17 per unit of volatility. If you would invest  1,201  in Midcap Growth Fund on May 16, 2025 and sell it today you would earn a total of  126.00  from holding Midcap Growth Fund or generate 10.49% return on investment over 90 days.

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

Mesirow Financial Small  vs.  Midcap Growth Fund

Mesirow Financial Small

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Mesirow Financial Small are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. 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.

Midcap Growth

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Midcap Growth Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Midcap Growth may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Mesirow Financial and Midcap Growth

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

The idea behind Mesirow Financial Small and Midcap Growth 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..