Correlation Between Meridian Trarian and Needham Growth

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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, 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

-0.5
  Correlation Coefficient

Very good diversification

The 3 months correlation between Meridian and Needham is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Trarian Fund and Needham Growth 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 Fund is expected to generate 0.61 times more return on investment than Needham Growth. However, Meridian Trarian Fund is 1.65 times less risky than Needham Growth. It trades about 0.2 of its potential returns per unit of risk. Needham Growth is currently generating about 0.01 per unit of risk. If you would invest  3,758  in Meridian Trarian Fund on September 12, 2024 and sell it today you would earn a total of  450.00  from holding Meridian Trarian Fund or generate 11.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Meridian Trarian Fund  vs.  Needham Growth

 Performance 
       Timeline  
Meridian Trarian 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Meridian Trarian Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Meridian Trarian may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Needham Growth 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Needham Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Needham Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.
The idea behind Meridian Trarian Fund and Needham Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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