Correlation Between International Investors and Meridian Growth
Can any of the company-specific risk be diversified away by investing in both International Investors 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 International Investors and Meridian Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Investors Gold and Meridian Growth Fund, you can compare the effects of market volatilities on International Investors 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 International Investors with a short position of Meridian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and Meridian Growth.
Diversification Opportunities for International Investors and Meridian Growth
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Meridian is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and Meridian Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Growth and International Investors 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 International Investors Gold 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 International Investors i.e., International Investors and Meridian Growth go up and down completely randomly.
Pair Corralation between International Investors and Meridian Growth
Assuming the 90 days horizon International Investors is expected to generate 7.1 times less return on investment than Meridian Growth. In addition to that, International Investors is 1.85 times more volatile than Meridian Growth Fund. It trades about 0.01 of its total potential returns per unit of risk. Meridian Growth Fund is currently generating about 0.12 per unit of volatility. If you would invest 3,641 in Meridian Growth Fund on September 13, 2024 and sell it today you would earn a total of 178.00 from holding Meridian Growth Fund or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
International Investors Gold vs. Meridian Growth Fund
Performance |
| Timeline |
| International Investors |
| Meridian Growth |
International Investors and Meridian Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and Meridian Growth
The main advantage of trading using opposite International Investors and Meridian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors 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 idea behind International Investors Gold and Meridian Growth Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Meridian Growth vs. Vanguard Small Cap Value | Meridian Growth vs. Fidelity Small Cap | Meridian Growth vs. Applied Finance Explorer | Meridian Growth vs. Royce Opportunity Fund |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |