Correlation Between Highland Longshort and Meridian Growth
Can any of the company-specific risk be diversified away by investing in both Highland Longshort 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 Highland Longshort and Meridian Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Longshort Healthcare and Meridian Growth Fund, you can compare the effects of market volatilities on Highland Longshort 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 Highland Longshort with a short position of Meridian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Longshort and Meridian Growth.
Diversification Opportunities for Highland Longshort and Meridian Growth
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Highland and Meridian is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Meridian Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Growth and Highland Longshort 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 Highland Longshort Healthcare 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 Highland Longshort i.e., Highland Longshort and Meridian Growth go up and down completely randomly.
Pair Corralation between Highland Longshort and Meridian Growth
Assuming the 90 days horizon Highland Longshort is expected to generate 2.3 times less return on investment than Meridian Growth. But when comparing it to its historical volatility, Highland Longshort Healthcare is 3.42 times less risky than Meridian Growth. It trades about 0.26 of its potential returns per unit of risk. Meridian Growth Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,693 in Meridian Growth Fund on November 5, 2024 and sell it today you would earn a total of 92.00 from holding Meridian Growth Fund or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Meridian Growth Fund
Performance |
| Timeline |
| Highland Longshort |
| Meridian Growth |
Highland Longshort and Meridian Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Longshort and Meridian Growth
The main advantage of trading using opposite Highland Longshort and Meridian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Longshort 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.| Highland Longshort vs. Tiaa Cref Lifecycle Retirement | Highland Longshort vs. Voya Retirement Servative | Highland Longshort vs. Wilmington Trust Retirement | Highland Longshort vs. Putnman Retirement Ready |
| Meridian Growth vs. Franklin Government Money | Meridian Growth vs. Chestnut Street Exchange | Meridian Growth vs. Fidelity Advisor Financial | Meridian Growth vs. Blackstone Secured Lending |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |