Correlation Between Meridian Growth and The Hartford
Can any of the company-specific risk be diversified away by investing in both Meridian Growth and The Hartford 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 The Hartford 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 The Hartford Midcap, you can compare the effects of market volatilities on Meridian Growth and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Growth and The Hartford.
Diversification Opportunities for Meridian Growth and The Hartford
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Meridian and The is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Growth Fund and The Hartford Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Midcap 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Midcap has no effect on the direction of Meridian Growth i.e., Meridian Growth and The Hartford go up and down completely randomly.
Pair Corralation between Meridian Growth and The Hartford
Assuming the 90 days horizon Meridian Growth is expected to generate 1.11 times less return on investment than The Hartford. In addition to that, Meridian Growth is 1.14 times more volatile than The Hartford Midcap. It trades about 0.25 of its total potential returns per unit of risk. The Hartford Midcap is currently generating about 0.31 per unit of volatility. If you would invest 3,348 in The Hartford Midcap on August 29, 2024 and sell it today you would earn a total of 262.00 from holding The Hartford Midcap or generate 7.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meridian Growth Fund vs. The Hartford Midcap
Performance |
| Timeline |
| Meridian Growth |
| Hartford Midcap |
Meridian Growth and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Growth and The Hartford
The main advantage of trading using opposite Meridian Growth and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Growth position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Meridian Growth vs. Putnam Equity Income | Meridian Growth vs. Putnam Growth Opportunities | Meridian Growth vs. HUMANA INC | Meridian Growth vs. Aquagold International |
| The Hartford vs. The Hartford Midcap | The Hartford vs. The Hartford Midcap | The Hartford vs. Janus Enterprise Fund | The Hartford vs. Janus Enterprise 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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