Correlation Between Cutler Equity and Meridian Growth
Can any of the company-specific risk be diversified away by investing in both Cutler Equity 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 Cutler Equity and Meridian Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cutler Equity and Meridian Growth Fund, you can compare the effects of market volatilities on Cutler Equity 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 Cutler Equity with a short position of Meridian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cutler Equity and Meridian Growth.
Diversification Opportunities for Cutler Equity and Meridian Growth
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cutler and Meridian is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Cutler Equity and Meridian Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Growth and Cutler Equity 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 Cutler Equity 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 Cutler Equity i.e., Cutler Equity and Meridian Growth go up and down completely randomly.
Pair Corralation between Cutler Equity and Meridian Growth
Assuming the 90 days horizon Cutler Equity is expected to generate 0.61 times more return on investment than Meridian Growth. However, Cutler Equity is 1.64 times less risky than Meridian Growth. It trades about 0.11 of its potential returns per unit of risk. Meridian Growth Fund is currently generating about -0.06 per unit of risk. If you would invest 2,857 in Cutler Equity on September 13, 2024 and sell it today you would earn a total of 33.00 from holding Cutler Equity or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cutler Equity vs. Meridian Growth Fund
Performance |
| Timeline |
| Cutler Equity |
| Meridian Growth |
Cutler Equity and Meridian Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cutler Equity and Meridian Growth
The main advantage of trading using opposite Cutler Equity and Meridian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cutler Equity 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.| Cutler Equity vs. Chestnut Street Exchange | Cutler Equity vs. The Gabelli Money | Cutler Equity vs. John Hancock Money | Cutler Equity vs. Dws Government Money |
| Meridian Growth vs. Barings Emerging Markets | Meridian Growth vs. Ashmore Emerging Markets | Meridian Growth vs. Shelton Emerging Markets | Meridian Growth vs. Pnc Emerging Markets |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |