Correlation Between Clipper Fund and Meridian Contrarian
Can any of the company-specific risk be diversified away by investing in both Clipper Fund and Meridian Contrarian 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 Contrarian 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 Trarian Fund, you can compare the effects of market volatilities on Clipper Fund and Meridian Contrarian 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 Contrarian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clipper Fund and Meridian Contrarian.
Diversification Opportunities for Clipper Fund and Meridian Contrarian
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CLIPPER and MERIDIAN is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Clipper Fund Inc and Meridian Trarian Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Contrarian 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 Contrarian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Contrarian has no effect on the direction of Clipper Fund i.e., Clipper Fund and Meridian Contrarian go up and down completely randomly.
Pair Corralation between Clipper Fund and Meridian Contrarian
Assuming the 90 days horizon Clipper Fund is expected to generate 1.69 times less return on investment than Meridian Contrarian. In addition to that, Clipper Fund is 1.08 times more volatile than Meridian Trarian Fund. It trades about 0.19 of its total potential returns per unit of risk. Meridian Trarian Fund is currently generating about 0.35 per unit of volatility. If you would invest 3,905 in Meridian Trarian Fund on August 29, 2024 and sell it today you would earn a total of 354.00 from holding Meridian Trarian Fund or generate 9.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Clipper Fund Inc vs. Meridian Trarian Fund
Performance |
| Timeline |
| Clipper Fund |
| Meridian Contrarian |
Clipper Fund and Meridian Contrarian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clipper Fund and Meridian Contrarian
The main advantage of trading using opposite Clipper Fund and Meridian Contrarian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clipper Fund position performs unexpectedly, Meridian Contrarian 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 Contrarian will offset losses from the drop in Meridian Contrarian'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 Contrarian vs. Meridian Growth Fund | Meridian Contrarian vs. Clipper Fund Inc | Meridian Contrarian vs. Mairs Power Growth | Meridian Contrarian vs. Thompson Largecap Fund |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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