Correlation Between Meeder Funds and Eafe Choice
Can any of the company-specific risk be diversified away by investing in both Meeder Funds and Eafe Choice 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 Meeder Funds and Eafe Choice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meeder Funds and The Eafe Choice, you can compare the effects of market volatilities on Meeder Funds and Eafe Choice 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 Meeder Funds with a short position of Eafe Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meeder Funds and Eafe Choice.
Diversification Opportunities for Meeder Funds and Eafe Choice
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Meeder and Eafe is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Meeder Funds and The Eafe Choice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eafe Choice and Meeder Funds 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 Meeder Funds are associated (or correlated) with Eafe Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eafe Choice has no effect on the direction of Meeder Funds i.e., Meeder Funds and Eafe Choice go up and down completely randomly.
Pair Corralation between Meeder Funds and Eafe Choice
Assuming the 90 days horizon Meeder Funds is expected to generate 19.66 times more return on investment than Eafe Choice. However, Meeder Funds is 19.66 times more volatile than The Eafe Choice. It trades about 0.04 of its potential returns per unit of risk. The Eafe Choice is currently generating about 0.02 per unit of risk. If you would invest 91.00 in Meeder Funds on September 2, 2024 and sell it today you would earn a total of 9.00 from holding Meeder Funds or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meeder Funds vs. The Eafe Choice
Performance |
| Timeline |
| Meeder Funds |
| Eafe Choice |
Meeder Funds and Eafe Choice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meeder Funds and Eafe Choice
The main advantage of trading using opposite Meeder Funds and Eafe Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meeder Funds position performs unexpectedly, Eafe Choice 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 Eafe Choice will offset losses from the drop in Eafe Choice's long position.| Meeder Funds vs. Dws Government Money | Meeder Funds vs. Blackrock Exchange Portfolio | Meeder Funds vs. Prudential Government Money | Meeder Funds vs. Chestnut Street Exchange |
| Eafe Choice vs. Blackrock Moderate Prepared | Eafe Choice vs. Saat Moderate Strategy | Eafe Choice vs. Target Retirement 2040 | Eafe Choice vs. Jp Morgan Smartretirement |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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