Correlation Between Muhlenkamp Fund and Meridian Growth
Can any of the company-specific risk be diversified away by investing in both Muhlenkamp Fund and Meridian Growth 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 Muhlenkamp Fund and Meridian Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Muhlenkamp Fund Institutional and Meridian Growth Fund, you can compare the effects of market volatilities on Muhlenkamp Fund and Meridian Growth 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 Muhlenkamp Fund with a short position of Meridian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muhlenkamp Fund and Meridian Growth.
Diversification Opportunities for Muhlenkamp Fund and Meridian Growth
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Muhlenkamp and Meridian is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Muhlenkamp Fund Institutional and Meridian Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Growth and Muhlenkamp Fund 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 Muhlenkamp Fund Institutional are associated (or correlated) with Meridian Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Growth has no effect on the direction of Muhlenkamp Fund i.e., Muhlenkamp Fund and Meridian Growth go up and down completely randomly.
Pair Corralation between Muhlenkamp Fund and Meridian Growth
Assuming the 90 days horizon Muhlenkamp Fund Institutional is expected to generate 0.72 times more return on investment than Meridian Growth. However, Muhlenkamp Fund Institutional is 1.38 times less risky than Meridian Growth. It trades about 0.09 of its potential returns per unit of risk. Meridian Growth Fund is currently generating about 0.05 per unit of risk. If you would invest 5,509 in Muhlenkamp Fund Institutional on August 28, 2024 and sell it today you would earn a total of 1,888 from holding Muhlenkamp Fund Institutional or generate 34.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Muhlenkamp Fund Institutional vs. Meridian Growth Fund
Performance |
| Timeline |
| Muhlenkamp Fund Inst |
| Meridian Growth |
Muhlenkamp Fund and Meridian Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muhlenkamp Fund and Meridian Growth
The main advantage of trading using opposite Muhlenkamp Fund and Meridian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muhlenkamp Fund position performs unexpectedly, Meridian Growth 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 Growth will offset losses from the drop in Meridian Growth's long position.| Muhlenkamp Fund vs. Third Avenue Value | Muhlenkamp Fund vs. Meridian Growth Fund | Muhlenkamp Fund vs. Heartland Value Fund | Muhlenkamp Fund vs. Mairs Power Growth |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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