Correlation Between Meridian Growth and Blackrock Midcap
Can any of the company-specific risk be diversified away by investing in both Meridian Growth and Blackrock Midcap 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 Meridian Growth and Blackrock Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meridian Growth Fund and Blackrock Midcap Index, you can compare the effects of market volatilities on Meridian Growth and Blackrock Midcap 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 Meridian Growth with a short position of Blackrock Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Growth and Blackrock Midcap.
Diversification Opportunities for Meridian Growth and Blackrock Midcap
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Meridian and Blackrock is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Growth Fund and Blackrock Midcap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Midcap Index and Meridian Growth 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 Meridian Growth Fund are associated (or correlated) with Blackrock Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Midcap Index has no effect on the direction of Meridian Growth i.e., Meridian Growth and Blackrock Midcap go up and down completely randomly.
Pair Corralation between Meridian Growth and Blackrock Midcap
Assuming the 90 days horizon Meridian Growth is expected to generate 1.41 times less return on investment than Blackrock Midcap. In addition to that, Meridian Growth is 1.23 times more volatile than Blackrock Midcap Index. It trades about 0.08 of its total potential returns per unit of risk. Blackrock Midcap Index is currently generating about 0.14 per unit of volatility. If you would invest 1,421 in Blackrock Midcap Index on August 25, 2024 and sell it today you would earn a total of 231.00 from holding Blackrock Midcap Index or generate 16.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meridian Growth Fund vs. Blackrock Midcap Index
Performance |
| Timeline |
| Meridian Growth |
| Blackrock Midcap Index |
Meridian Growth and Blackrock Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Growth and Blackrock Midcap
The main advantage of trading using opposite Meridian Growth and Blackrock Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Growth position performs unexpectedly, Blackrock Midcap 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 Blackrock Midcap will offset losses from the drop in Blackrock Midcap's long position.| Meridian Growth vs. Technology Ultrasector Profund | Meridian Growth vs. Invesco Technology Fund | Meridian Growth vs. Columbia Global Technology | Meridian Growth vs. Janus Global Technology |
| Blackrock Midcap vs. Fam Equity Income Fund | Blackrock Midcap vs. Meridian Growth Fund | Blackrock Midcap vs. Muhlenkamp Fund Institutional | Blackrock Midcap vs. Royce Pennsylvania Mutual |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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