Correlation Between Emerald Banking and Meridian Small
Can any of the company-specific risk be diversified away by investing in both Emerald Banking and Meridian Small 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 Emerald Banking and Meridian Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerald Banking And and Meridian Small Cap, you can compare the effects of market volatilities on Emerald Banking and Meridian Small 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 Emerald Banking with a short position of Meridian Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerald Banking and Meridian Small.
Diversification Opportunities for Emerald Banking and Meridian Small
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between EMERALD and Meridian is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Emerald Banking And and Meridian Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Small Cap and Emerald Banking 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 Emerald Banking And are associated (or correlated) with Meridian Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Small Cap has no effect on the direction of Emerald Banking i.e., Emerald Banking and Meridian Small go up and down completely randomly.
Pair Corralation between Emerald Banking and Meridian Small
Assuming the 90 days horizon Emerald Banking And is expected to generate 1.49 times more return on investment than Meridian Small. However, Emerald Banking is 1.49 times more volatile than Meridian Small Cap. It trades about 0.16 of its potential returns per unit of risk. Meridian Small Cap is currently generating about 0.09 per unit of risk. If you would invest 1,771 in Emerald Banking And on September 1, 2024 and sell it today you would earn a total of 700.00 from holding Emerald Banking And or generate 39.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerald Banking And vs. Meridian Small Cap
Performance |
| Timeline |
| Emerald Banking And |
| Meridian Small Cap |
Emerald Banking and Meridian Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerald Banking and Meridian Small
The main advantage of trading using opposite Emerald Banking and Meridian Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerald Banking position performs unexpectedly, Meridian Small 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 Small will offset losses from the drop in Meridian Small's long position.| Emerald Banking vs. Emerald Banking And | Emerald Banking vs. Emerald Banking And | Emerald Banking vs. Emerald Banking And | Emerald Banking vs. Rmb Mendon Financial |
| Meridian Small vs. Meridian Equity Income | Meridian Small vs. Meridian Equity Income | Meridian Small vs. Meridian Growth Fund | Meridian Small 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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