Correlation Between Meridian Growth and Clipper Fund
Can any of the company-specific risk be diversified away by investing in both Meridian Growth and Clipper Fund 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 Clipper Fund 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 Clipper Fund Inc, you can compare the effects of market volatilities on Meridian Growth and Clipper Fund 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 Clipper Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Growth and Clipper Fund.
Diversification Opportunities for Meridian Growth and Clipper Fund
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Meridian and CLIPPER is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Growth Fund and Clipper Fund Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clipper Fund 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 Clipper Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clipper Fund has no effect on the direction of Meridian Growth i.e., Meridian Growth and Clipper Fund go up and down completely randomly.
Pair Corralation between Meridian Growth and Clipper Fund
Assuming the 90 days horizon Meridian Growth is expected to generate 2.95 times less return on investment than Clipper Fund. In addition to that, Meridian Growth is 1.17 times more volatile than Clipper Fund Inc. It trades about 0.02 of its total potential returns per unit of risk. Clipper Fund Inc is currently generating about 0.08 per unit of volatility. If you would invest 10,547 in Clipper Fund Inc on August 29, 2024 and sell it today you would earn a total of 5,006 from holding Clipper Fund Inc or generate 47.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meridian Growth Fund vs. Clipper Fund Inc
Performance |
| Timeline |
| Meridian Growth |
| Clipper Fund |
Meridian Growth and Clipper Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Growth and Clipper Fund
The main advantage of trading using opposite Meridian Growth and Clipper Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Growth position performs unexpectedly, Clipper Fund 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 Clipper Fund will offset losses from the drop in Clipper Fund's long position.| Meridian Growth vs. Icon Natural Resources | Meridian Growth vs. Guinness Atkinson Alternative | Meridian Growth vs. Dreyfus Natural Resources | Meridian Growth vs. Tortoise Energy Independence |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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