Correlation Between Live Oak and Meridian Growth
Can any of the company-specific risk be diversified away by investing in both Live Oak 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 Live Oak and Meridian Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Oak Health and Meridian Growth Fund, you can compare the effects of market volatilities on Live Oak 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 Live Oak with a short position of Meridian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Meridian Growth.
Diversification Opportunities for Live Oak and Meridian Growth
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Live and Meridian is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Meridian Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Growth and Live Oak 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 Live Oak Health 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 Live Oak i.e., Live Oak and Meridian Growth go up and down completely randomly.
Pair Corralation between Live Oak and Meridian Growth
Assuming the 90 days horizon Live Oak is expected to generate 4.41 times less return on investment than Meridian Growth. But when comparing it to its historical volatility, Live Oak Health is 1.41 times less risky than Meridian Growth. It trades about 0.02 of its potential returns per unit of risk. Meridian Growth Fund is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,129 in Meridian Growth Fund on September 3, 2024 and sell it today you would earn a total of 761.00 from holding Meridian Growth Fund or generate 24.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Meridian Growth Fund
Performance |
| Timeline |
| Live Oak Health |
| Meridian Growth |
Live Oak and Meridian Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Meridian Growth
The main advantage of trading using opposite Live Oak and Meridian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak 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.| Live Oak vs. Vanguard Health Care | Live Oak vs. Vanguard Health Care | Live Oak vs. T Rowe Price | Live Oak vs. T Rowe Price |
| Meridian Growth vs. Qs Large Cap | Meridian Growth vs. Fidelity Series 1000 | Meridian Growth vs. Vela Large Cap | Meridian Growth vs. Qs Large Cap |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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