Correlation Between Gmo Alternative and Meridian Growth
Can any of the company-specific risk be diversified away by investing in both Gmo Alternative 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 Gmo Alternative and Meridian Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Alternative Allocation and Meridian Growth Fund, you can compare the effects of market volatilities on Gmo Alternative 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 Gmo Alternative with a short position of Meridian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Alternative and Meridian Growth.
Diversification Opportunities for Gmo Alternative and Meridian Growth
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gmo and Meridian is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Alternative Allocation and Meridian Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Growth and Gmo Alternative 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 Gmo Alternative Allocation 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 Gmo Alternative i.e., Gmo Alternative and Meridian Growth go up and down completely randomly.
Pair Corralation between Gmo Alternative and Meridian Growth
Assuming the 90 days horizon Gmo Alternative is expected to generate 1.95 times less return on investment than Meridian Growth. In addition to that, Gmo Alternative is 1.06 times more volatile than Meridian Growth Fund. It trades about 0.03 of its total potential returns per unit of risk. Meridian Growth Fund is currently generating about 0.06 per unit of volatility. If you would invest 3,665 in Meridian Growth Fund on October 23, 2024 and sell it today you would earn a total of 31.00 from holding Meridian Growth Fund or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Alternative Allocation vs. Meridian Growth Fund
Performance |
| Timeline |
| Gmo Alternative Allo |
| Meridian Growth |
Gmo Alternative and Meridian Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Alternative and Meridian Growth
The main advantage of trading using opposite Gmo Alternative and Meridian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Alternative 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.| Gmo Alternative vs. Aqr Long Short Equity | Gmo Alternative vs. Gmo Global Equity | Gmo Alternative vs. Smallcap World Fund | Gmo Alternative vs. Old Westbury Fixed |
| Meridian Growth vs. Eagle Mlp Strategy | Meridian Growth vs. Saat Defensive Strategy | Meridian Growth vs. Barings Emerging Markets | Meridian Growth vs. Alphacentric Symmetry Strategy |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |