Correlation Between Mfs Value and Meridian Contrarian
Can any of the company-specific risk be diversified away by investing in both Mfs Value and Meridian Contrarian 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 Mfs Value and Meridian Contrarian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Value Fund and Meridian Trarian Fund, you can compare the effects of market volatilities on Mfs Value and Meridian Contrarian 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 Mfs Value with a short position of Meridian Contrarian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Value and Meridian Contrarian.
Diversification Opportunities for Mfs Value and Meridian Contrarian
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Meridian is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Value Fund and Meridian Trarian Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Contrarian and Mfs Value 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 Mfs Value Fund are associated (or correlated) with Meridian Contrarian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Contrarian has no effect on the direction of Mfs Value i.e., Mfs Value and Meridian Contrarian go up and down completely randomly.
Pair Corralation between Mfs Value and Meridian Contrarian
Assuming the 90 days horizon Mfs Value is expected to generate 1.35 times less return on investment than Meridian Contrarian. But when comparing it to its historical volatility, Mfs Value Fund is 1.67 times less risky than Meridian Contrarian. It trades about 0.13 of its potential returns per unit of risk. Meridian Trarian Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,677 in Meridian Trarian Fund on September 1, 2024 and sell it today you would earn a total of 543.00 from holding Meridian Trarian Fund or generate 14.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Value Fund vs. Meridian Trarian Fund
Performance |
| Timeline |
| Mfs Value Fund |
| Meridian Contrarian |
Mfs Value and Meridian Contrarian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Value and Meridian Contrarian
The main advantage of trading using opposite Mfs Value and Meridian Contrarian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Value position performs unexpectedly, Meridian Contrarian 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 Contrarian will offset losses from the drop in Meridian Contrarian's long position.| Mfs Value vs. Fidelity Advisor Financial | Mfs Value vs. Goldman Sachs Financial | Mfs Value vs. Davis Financial Fund | Mfs Value vs. Icon Financial Fund |
| Meridian Contrarian vs. Meridian Trarian Fund | Meridian Contrarian vs. Meridian Trarian Fund | Meridian Contrarian vs. Fidelity Advisor Mid | Meridian Contrarian vs. Boston Trust Midcap |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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