Correlation Between Meridian Contrarian and Mairs Power
Can any of the company-specific risk be diversified away by investing in both Meridian Contrarian and Mairs Power 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 Mairs Power 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 Mairs Power Growth, you can compare the effects of market volatilities on Meridian Contrarian and Mairs Power 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 Mairs Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Contrarian and Mairs Power.
Diversification Opportunities for Meridian Contrarian and Mairs Power
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MERIDIAN and Mairs is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Trarian Fund and Mairs Power Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mairs Power Growth 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 Mairs Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mairs Power Growth has no effect on the direction of Meridian Contrarian i.e., Meridian Contrarian and Mairs Power go up and down completely randomly.
Pair Corralation between Meridian Contrarian and Mairs Power
Assuming the 90 days horizon Meridian Trarian Fund is expected to generate 1.24 times more return on investment than Mairs Power. However, Meridian Contrarian is 1.24 times more volatile than Mairs Power Growth. It trades about 0.1 of its potential returns per unit of risk. Mairs Power Growth is currently generating about 0.11 per unit of risk. If you would invest 3,740 in Meridian Trarian Fund on August 29, 2024 and sell it today you would earn a total of 522.00 from holding Meridian Trarian Fund or generate 13.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meridian Trarian Fund vs. Mairs Power Growth
Performance |
| Timeline |
| Meridian Contrarian |
| Mairs Power Growth |
Meridian Contrarian and Mairs Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Contrarian and Mairs Power
The main advantage of trading using opposite Meridian Contrarian and Mairs Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Contrarian position performs unexpectedly, Mairs Power 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 Mairs Power will offset losses from the drop in Mairs Power'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 |
| Mairs Power vs. Vanguard Total Stock | Mairs Power vs. Vanguard 500 Index | Mairs Power vs. Vanguard Total Stock | Mairs Power vs. Vanguard Total Stock |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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