Correlation Between Meridian Contrarian and Pro-blend(r) Extended
Can any of the company-specific risk be diversified away by investing in both Meridian Contrarian and Pro-blend(r) Extended 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 Contrarian and Pro-blend(r) Extended into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meridian Trarian Fund and Pro Blend Extended Term, you can compare the effects of market volatilities on Meridian Contrarian and Pro-blend(r) Extended 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 Contrarian with a short position of Pro-blend(r) Extended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Contrarian and Pro-blend(r) Extended.
Diversification Opportunities for Meridian Contrarian and Pro-blend(r) Extended
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Meridian and Pro-blend(r) is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Trarian Fund and Pro Blend Extended Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro-blend(r) Extended and Meridian Contrarian 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 Trarian Fund are associated (or correlated) with Pro-blend(r) Extended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro-blend(r) Extended has no effect on the direction of Meridian Contrarian i.e., Meridian Contrarian and Pro-blend(r) Extended go up and down completely randomly.
Pair Corralation between Meridian Contrarian and Pro-blend(r) Extended
Assuming the 90 days horizon Meridian Trarian Fund is expected to under-perform the Pro-blend(r) Extended. In addition to that, Meridian Contrarian is 1.59 times more volatile than Pro Blend Extended Term. It trades about -0.17 of its total potential returns per unit of risk. Pro Blend Extended Term is currently generating about -0.07 per unit of volatility. If you would invest 2,024 in Pro Blend Extended Term on November 4, 2024 and sell it today you would lose (41.00) from holding Pro Blend Extended Term or give up 2.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meridian Trarian Fund vs. Pro Blend Extended Term
Performance |
| Timeline |
| Meridian Contrarian |
| Pro-blend(r) Extended |
Meridian Contrarian and Pro-blend(r) Extended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Contrarian and Pro-blend(r) Extended
The main advantage of trading using opposite Meridian Contrarian and Pro-blend(r) Extended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Contrarian position performs unexpectedly, Pro-blend(r) Extended 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 Pro-blend(r) Extended will offset losses from the drop in Pro-blend(r) Extended's long position.| Meridian Contrarian vs. Meridian Growth Fund | Meridian Contrarian vs. Clipper Fund Inc | Meridian Contrarian vs. Mairs Power Growth | Meridian Contrarian vs. Thompson Largecap Fund |
| 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 |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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