Correlation Between Meridianlink and PAR Technology
Can any of the company-specific risk be diversified away by investing in both Meridianlink and PAR Technology 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 Meridianlink and PAR Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meridianlink and PAR Technology, you can compare the effects of market volatilities on Meridianlink and PAR Technology 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 Meridianlink with a short position of PAR Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridianlink and PAR Technology.
Diversification Opportunities for Meridianlink and PAR Technology
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Meridianlink and PAR is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Meridianlink and PAR Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAR Technology and Meridianlink 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 Meridianlink are associated (or correlated) with PAR Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAR Technology has no effect on the direction of Meridianlink i.e., Meridianlink and PAR Technology go up and down completely randomly.
Pair Corralation between Meridianlink and PAR Technology
Given the investment horizon of 90 days Meridianlink is expected to under-perform the PAR Technology. But the stock apears to be less risky and, when comparing its historical volatility, Meridianlink is 1.34 times less risky than PAR Technology. The stock trades about -0.06 of its potential returns per unit of risk. The PAR Technology is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5,323 in PAR Technology on October 22, 2024 and sell it today you would earn a total of 1,997 from holding PAR Technology or generate 37.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meridianlink vs. PAR Technology
Performance |
| Timeline |
| Meridianlink |
| PAR Technology |
Meridianlink and PAR Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridianlink and PAR Technology
The main advantage of trading using opposite Meridianlink and PAR Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridianlink position performs unexpectedly, PAR Technology 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 PAR Technology will offset losses from the drop in PAR Technology's long position.| Meridianlink vs. CoreCard Corp | Meridianlink vs. PROS Holdings | Meridianlink vs. Enfusion | Meridianlink vs. Paylocity Holdng |
| PAR Technology vs. CS Disco LLC | PAR Technology vs. PROS Holdings | PAR Technology vs. Meridianlink | PAR Technology vs. Enfusion |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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