Correlation Between Meridian Growth and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Meridian Growth and Ashmore Emerging 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 Ashmore Emerging 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 Ashmore Emerging Markets, you can compare the effects of market volatilities on Meridian Growth and Ashmore Emerging 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 Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Growth and Ashmore Emerging.
Diversification Opportunities for Meridian Growth and Ashmore Emerging
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Meridian and Ashmore is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Growth Fund and Ashmore Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Emerging Markets 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 Ashmore Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Emerging Markets has no effect on the direction of Meridian Growth i.e., Meridian Growth and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Meridian Growth and Ashmore Emerging
Assuming the 90 days horizon Meridian Growth Fund is expected to generate 6.84 times more return on investment than Ashmore Emerging. However, Meridian Growth is 6.84 times more volatile than Ashmore Emerging Markets. It trades about 0.27 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.04 per unit of risk. If you would invest 3,134 in Meridian Growth Fund on August 30, 2024 and sell it today you would earn a total of 238.00 from holding Meridian Growth Fund or generate 7.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meridian Growth Fund vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Meridian Growth |
| Ashmore Emerging Markets |
Meridian Growth and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Growth and Ashmore Emerging
The main advantage of trading using opposite Meridian Growth and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Growth position performs unexpectedly, Ashmore Emerging 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 Ashmore Emerging will offset losses from the drop in Ashmore Emerging's long position.| Meridian Growth vs. Technology Ultrasector Profund | Meridian Growth vs. Dreyfus Technology Growth | Meridian Growth vs. Towpath Technology | Meridian Growth vs. Fidelity Advisor Technology |
| Ashmore Emerging vs. Financial Industries Fund | Ashmore Emerging vs. Mesirow Financial Small | Ashmore Emerging vs. T Rowe Price | Ashmore Emerging vs. Transamerica Funds |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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