Correlation Between Technology Fund and Mesirow Financial

Can any of the company-specific risk be diversified away by investing in both Technology Fund and Mesirow 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 Technology Fund and Mesirow Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Technology Fund Class and Mesirow Financial Small, you can compare the effects of market volatilities on Technology Fund and Mesirow 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 Technology Fund with a short position of Mesirow Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technology Fund and Mesirow Financial.

Diversification Opportunities for Technology Fund and Mesirow Financial

0.72

Correlation Coefficient

Technology Fund  Mesirow Financial

Poor diversification

The 3 months correlation between Technology and Mesirow is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Technology Fund Class and Mesirow Financial Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesirow Financial Small and Technology Fund 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 Technology Fund Class are associated (or correlated) with Mesirow Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesirow Financial Small has no effect on the direction of Technology Fund i.e., Technology Fund and Mesirow Financial go up and down completely randomly.

Pair Corralation between Technology Fund and Mesirow Financial

Assuming the 90 days horizon Technology Fund Class is expected to generate 0.9 times more return on investment than Mesirow Financial. However, Technology Fund Class is 1.11 times less risky than Mesirow Financial. It trades about 0.22 of its potential returns per unit of risk. Mesirow Financial Small is currently generating about 0.12 per unit of risk. If you would invest  16,692  in Technology Fund Class on June 28, 2025 and sell it today you would earn a total of  2,160  from holding Technology Fund Class or generate 12.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Technology Fund Class  vs.  Mesirow Financial Small

Technology Fund Class

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Technology Fund Class are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Technology Fund showed solid returns over the last few months and may actually be approaching a breakup point.

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 9 (%) 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 October 2025.

Pair Trading with Technology Fund and Mesirow Financial

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

The idea behind Technology Fund Class and Mesirow Financial Small 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.