Correlation Between Meridian Growth and Nuveen Dow
Can any of the company-specific risk be diversified away by investing in both Meridian Growth and Nuveen Dow 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 Nuveen Dow 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 Nuveen Dow 30, you can compare the effects of market volatilities on Meridian Growth and Nuveen Dow 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 Nuveen Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Growth and Nuveen Dow.
Diversification Opportunities for Meridian Growth and Nuveen Dow
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Meridian and Nuveen is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Growth Fund and Nuveen Dow 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Dow 30 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 Nuveen Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Dow 30 has no effect on the direction of Meridian Growth i.e., Meridian Growth and Nuveen Dow go up and down completely randomly.
Pair Corralation between Meridian Growth and Nuveen Dow
Assuming the 90 days horizon Meridian Growth Fund is expected to generate 1.85 times more return on investment than Nuveen Dow. However, Meridian Growth is 1.85 times more volatile than Nuveen Dow 30. It trades about 0.02 of its potential returns per unit of risk. Nuveen Dow 30 is currently generating about 0.02 per unit of risk. If you would invest 3,521 in Meridian Growth Fund on September 3, 2024 and sell it today you would earn a total of 369.00 from holding Meridian Growth Fund or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meridian Growth Fund vs. Nuveen Dow 30
Performance |
| Timeline |
| Meridian Growth |
| Nuveen Dow 30 |
Meridian Growth and Nuveen Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Growth and Nuveen Dow
The main advantage of trading using opposite Meridian Growth and Nuveen Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Growth position performs unexpectedly, Nuveen Dow 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 Nuveen Dow will offset losses from the drop in Nuveen Dow's long position.| Meridian Growth vs. Qs Large Cap | Meridian Growth vs. Fidelity Series 1000 | Meridian Growth vs. Vela Large Cap | Meridian Growth vs. Qs Large Cap |
| Nuveen Dow vs. Nuveen Symphony Floating | Nuveen Dow vs. Nuveen Symphony Floating | Nuveen Dow vs. Nuveen Symphony Floating | Nuveen Dow vs. Nuveen Symphony Floating |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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