Correlation Between Clipper Fund and Meridian Growth
Can any of the company-specific risk be diversified away by investing in both Clipper Fund and Meridian 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 Clipper Fund and Meridian Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clipper Fund Inc and Meridian Growth Fund, you can compare the effects of market volatilities on Clipper Fund and Meridian 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 Clipper Fund with a short position of Meridian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clipper Fund and Meridian Growth.
Diversification Opportunities for Clipper Fund and Meridian Growth
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Clipper and Meridian is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Clipper Fund Inc and Meridian Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Growth and Clipper 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 Clipper Fund Inc are associated (or correlated) with Meridian Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Growth has no effect on the direction of Clipper Fund i.e., Clipper Fund and Meridian Growth go up and down completely randomly.
Pair Corralation between Clipper Fund and Meridian Growth
Assuming the 90 days horizon Clipper Fund is expected to generate 1.05 times less return on investment than Meridian Growth. But when comparing it to its historical volatility, Clipper Fund Inc is 1.07 times less risky than Meridian Growth. It trades about 0.07 of its potential returns per unit of risk. Meridian Growth Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,431 in Meridian Growth Fund on September 1, 2024 and sell it today you would earn a total of 441.00 from holding Meridian Growth Fund or generate 12.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Clipper Fund Inc vs. Meridian Growth Fund
Performance |
| Timeline |
| Clipper Fund |
| Meridian Growth |
Clipper Fund and Meridian Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clipper Fund and Meridian Growth
The main advantage of trading using opposite Clipper Fund and Meridian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clipper Fund position performs unexpectedly, Meridian 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 Meridian Growth will offset losses from the drop in Meridian Growth's long position.| Clipper Fund vs. Value Fund Value | Clipper Fund vs. Meridian Trarian Fund | Clipper Fund vs. Longleaf Partners Fund | Clipper Fund vs. Mairs Power Growth |
| Meridian Growth vs. Meridian Equity Income | Meridian Growth vs. Meridian Equity Income | Meridian Growth vs. Meridian Growth Fund | Meridian Growth vs. Meridian Equity Income |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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