Correlation Between Mesirow Financial and Nasdaq-100 Index

Can any of the company-specific risk be diversified away by investing in both Mesirow Financial and Nasdaq-100 Index 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 Nasdaq-100 Index 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 Nasdaq 100 Index Fund, you can compare the effects of market volatilities on Mesirow Financial and Nasdaq-100 Index 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 Nasdaq-100 Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesirow Financial and Nasdaq-100 Index.

Diversification Opportunities for Mesirow Financial and Nasdaq-100 Index

0.9

Correlation Coefficient

Mesirow Financial  Nasdaq-100 Index

Almost no diversification

The 3 months correlation between Mesirow and Nasdaq-100 is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mesirow Financial Small and Nasdaq 100 Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Index 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 Nasdaq-100 Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Index has no effect on the direction of Mesirow Financial i.e., Mesirow Financial and Nasdaq-100 Index go up and down completely randomly.

Pair Corralation between Mesirow Financial and Nasdaq-100 Index

Assuming the 90 days horizon Mesirow Financial Small is expected to generate 1.36 times more return on investment than Nasdaq-100 Index. However, Mesirow Financial is 1.36 times more volatile than Nasdaq 100 Index Fund. It trades about 0.17 of its potential returns per unit of risk. Nasdaq 100 Index Fund is currently generating about 0.2 per unit of risk. If you would invest  1,201  in Mesirow Financial Small on May 26, 2025 and sell it today you would earn a total of  134.00  from holding Mesirow Financial Small or generate 11.16% return on investment over 90 days.

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

Mesirow Financial Small  vs.  Nasdaq 100 Index Fund

Mesirow Financial Small

Risk-Adjusted Performance

Good

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

Nasdaq 100 Index

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq 100 Index Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Nasdaq-100 Index may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Mesirow Financial and Nasdaq-100 Index

The main advantage of trading using opposite Mesirow Financial and Nasdaq-100 Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesirow Financial position performs unexpectedly, Nasdaq-100 Index 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 Nasdaq-100 Index will offset losses from the drop in Nasdaq-100 Index's long position.

The idea behind Mesirow Financial Small and Nasdaq 100 Index 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 Transaction History module to view history of all your transactions and understand their impact on performance.