Correlation Between The Hartford and Meridian Growth
Can any of the company-specific risk be diversified away by investing in both The Hartford 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 The Hartford and Meridian Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Midcap and Meridian Growth Fund, you can compare the effects of market volatilities on The Hartford 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 The Hartford with a short position of Meridian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Meridian Growth.
Diversification Opportunities for The Hartford and Meridian Growth
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between The and Meridian is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Midcap and Meridian Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Growth and The Hartford 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 The Hartford Midcap 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 The Hartford i.e., The Hartford and Meridian Growth go up and down completely randomly.
Pair Corralation between The Hartford and Meridian Growth
Assuming the 90 days horizon The Hartford Midcap is expected to generate 1.0 times more return on investment than Meridian Growth. However, The Hartford is 1.0 times more volatile than Meridian Growth Fund. It trades about 0.11 of its potential returns per unit of risk. Meridian Growth Fund is currently generating about 0.09 per unit of risk. If you would invest 3,165 in The Hartford Midcap on September 1, 2024 and sell it today you would earn a total of 465.00 from holding The Hartford Midcap or generate 14.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
The Hartford Midcap vs. Meridian Growth Fund
Performance |
| Timeline |
| Hartford Midcap |
| Meridian Growth |
The Hartford and Meridian Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Meridian Growth
The main advantage of trading using opposite The Hartford and Meridian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford 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.| The Hartford vs. The Hartford Midcap | The Hartford vs. Janus Enterprise Fund | The Hartford vs. Janus Enterprise Fund | The Hartford vs. T Rowe Price |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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