Correlation Between Pro-blend(r) Extended and Meridian Contrarian
Can any of the company-specific risk be diversified away by investing in both Pro-blend(r) Extended and Meridian Contrarian 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 Pro-blend(r) Extended and Meridian Contrarian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pro Blend Extended Term and Meridian Trarian Fund, you can compare the effects of market volatilities on Pro-blend(r) Extended and Meridian Contrarian 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 Pro-blend(r) Extended with a short position of Meridian Contrarian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro-blend(r) Extended and Meridian Contrarian.
Diversification Opportunities for Pro-blend(r) Extended and Meridian Contrarian
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pro-blend(r) and Meridian is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Pro Blend Extended Term and Meridian Trarian Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Contrarian and Pro-blend(r) Extended 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 Pro Blend Extended Term are associated (or correlated) with Meridian Contrarian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Contrarian has no effect on the direction of Pro-blend(r) Extended i.e., Pro-blend(r) Extended and Meridian Contrarian go up and down completely randomly.
Pair Corralation between Pro-blend(r) Extended and Meridian Contrarian
Assuming the 90 days horizon Pro-blend(r) Extended is expected to generate 1.03 times less return on investment than Meridian Contrarian. But when comparing it to its historical volatility, Pro Blend Extended Term is 2.26 times less risky than Meridian Contrarian. It trades about 0.1 of its potential returns per unit of risk. Meridian Trarian Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,698 in Meridian Trarian Fund on September 1, 2024 and sell it today you would earn a total of 577.00 from holding Meridian Trarian Fund or generate 15.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Pro Blend Extended Term vs. Meridian Trarian Fund
Performance |
| Timeline |
| Pro-blend(r) Extended |
| Meridian Contrarian |
Pro-blend(r) Extended and Meridian Contrarian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pro-blend(r) Extended and Meridian Contrarian
The main advantage of trading using opposite Pro-blend(r) Extended and Meridian Contrarian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro-blend(r) Extended position performs unexpectedly, Meridian Contrarian 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 Contrarian will offset losses from the drop in Meridian Contrarian's long position.| Pro-blend(r) Extended vs. Pro Blend Moderate Term | Pro-blend(r) Extended vs. Pro Blend Maximum Term | Pro-blend(r) Extended vs. Pro Blend Servative Term | Pro-blend(r) Extended vs. Madison Mid Cap |
| Meridian Contrarian vs. Meridian Growth Fund | Meridian Contrarian vs. Clipper Fund Inc | Meridian Contrarian vs. Mairs Power Growth | Meridian Contrarian vs. Thompson Largecap Fund |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Positions Ratings 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 | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |