Correlation Between Mairs Power and Meridian Contrarian
Can any of the company-specific risk be diversified away by investing in both Mairs Power 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 Mairs Power and Meridian Contrarian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mairs Power Growth and Meridian Trarian Fund, you can compare the effects of market volatilities on Mairs Power 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 Mairs Power with a short position of Meridian Contrarian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and Meridian Contrarian.
Diversification Opportunities for Mairs Power and Meridian Contrarian
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mairs and Meridian is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Growth and Meridian Trarian Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Contrarian and Mairs Power 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 Mairs Power Growth 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 Mairs Power i.e., Mairs Power and Meridian Contrarian go up and down completely randomly.
Pair Corralation between Mairs Power and Meridian Contrarian
Assuming the 90 days horizon Mairs Power Growth is expected to generate 0.79 times more return on investment than Meridian Contrarian. However, Mairs Power Growth is 1.26 times less risky than Meridian Contrarian. It trades about 0.11 of its potential returns per unit of risk. Meridian Trarian Fund is currently generating about 0.02 per unit of risk. If you would invest 11,783 in Mairs Power Growth on August 30, 2024 and sell it today you would earn a total of 6,464 from holding Mairs Power Growth or generate 54.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mairs Power Growth vs. Meridian Trarian Fund
Performance |
| Timeline |
| Mairs Power Growth |
| Meridian Contrarian |
Mairs Power and Meridian Contrarian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mairs Power and Meridian Contrarian
The main advantage of trading using opposite Mairs Power and Meridian Contrarian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power 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.| Mairs Power vs. Vanguard Total Stock | Mairs Power vs. Vanguard 500 Index | Mairs Power vs. Vanguard Total Stock | Mairs Power vs. Vanguard Total Stock |
| Meridian Contrarian vs. Meridian Trarian Fund | Meridian Contrarian vs. Meridian Trarian Fund | Meridian Contrarian vs. Fidelity Advisor Mid | Meridian Contrarian vs. Boston Trust Midcap |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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