Correlation Between Meridian Contrarian and Meridian Small
Can any of the company-specific risk be diversified away by investing in both Meridian Contrarian and Meridian Small 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 Contrarian and Meridian Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meridian Trarian Fund and Meridian Small Cap, you can compare the effects of market volatilities on Meridian Contrarian and Meridian Small 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 Contrarian with a short position of Meridian Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Contrarian and Meridian Small.
Diversification Opportunities for Meridian Contrarian and Meridian Small
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Meridian and Meridian is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Trarian Fund and Meridian Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Small Cap and Meridian Contrarian 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 Trarian Fund are associated (or correlated) with Meridian Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Small Cap has no effect on the direction of Meridian Contrarian i.e., Meridian Contrarian and Meridian Small go up and down completely randomly.
Pair Corralation between Meridian Contrarian and Meridian Small
Assuming the 90 days horizon Meridian Trarian Fund is expected to generate 0.87 times more return on investment than Meridian Small. However, Meridian Trarian Fund is 1.14 times less risky than Meridian Small. It trades about 0.46 of its potential returns per unit of risk. Meridian Small Cap is currently generating about 0.35 per unit of risk. If you would invest 3,444 in Meridian Trarian Fund on September 1, 2024 and sell it today you would earn a total of 370.00 from holding Meridian Trarian Fund or generate 10.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meridian Trarian Fund vs. Meridian Small Cap
Performance |
| Timeline |
| Meridian Contrarian |
| Meridian Small Cap |
Meridian Contrarian and Meridian Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Contrarian and Meridian Small
The main advantage of trading using opposite Meridian Contrarian and Meridian Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Contrarian position performs unexpectedly, Meridian Small 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 Small will offset losses from the drop in Meridian Small's long position.| Meridian Contrarian vs. Meridian Trarian Fund | Meridian Contrarian vs. Fidelity Advisor Mid | Meridian Contrarian vs. Boston Trust Midcap | Meridian Contrarian vs. Tarkio Fund Tarkio |
| Meridian Small vs. Meridian Equity Income | Meridian Small vs. Meridian Equity Income | Meridian Small vs. Meridian Growth Fund | Meridian Small vs. Meridian Equity Income |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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