Correlation Between Meridian Trarian and Needham Growth
Can any of the company-specific risk be diversified away by investing in both Meridian Trarian and Needham 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 Meridian Trarian and Needham Growth 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 Needham Growth Fund, you can compare the effects of market volatilities on Meridian Trarian and Needham 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 Meridian Trarian with a short position of Needham Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Trarian and Needham Growth.
Diversification Opportunities for Meridian Trarian and Needham Growth
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meridian and Needham is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Trarian Fund and Needham Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Needham Growth and Meridian Trarian 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 Needham Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Needham Growth has no effect on the direction of Meridian Trarian i.e., Meridian Trarian and Needham Growth go up and down completely randomly.
Pair Corralation between Meridian Trarian and Needham Growth
Assuming the 90 days horizon Meridian Trarian is expected to generate 1.96 times less return on investment than Needham Growth. But when comparing it to its historical volatility, Meridian Trarian Fund is 1.58 times less risky than Needham Growth. It trades about 0.05 of its potential returns per unit of risk. Needham Growth Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,078 in Needham Growth Fund on September 12, 2024 and sell it today you would earn a total of 1,500 from holding Needham Growth Fund or generate 29.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meridian Trarian Fund vs. Needham Growth Fund
Performance |
| Timeline |
| Meridian Trarian |
| Needham Growth |
Meridian Trarian and Needham Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Trarian and Needham Growth
The main advantage of trading using opposite Meridian Trarian and Needham Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Trarian position performs unexpectedly, Needham 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 Needham Growth will offset losses from the drop in Needham Growth's long position.| Meridian Trarian vs. Meridian Growth Fund | Meridian Trarian vs. Clipper Fund Inc | Meridian Trarian vs. Mairs Power Growth | Meridian Trarian vs. Thompson Largecap Fund |
| Needham Growth vs. Needham Aggressive Growth | Needham Growth vs. Needham Small Cap | Needham Growth vs. Aggressive Investors 1 | Needham Growth vs. Meridian Trarian 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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