Correlation Between Meridian Contrarian and Oakmark Select
Can any of the company-specific risk be diversified away by investing in both Meridian Contrarian and Oakmark Select 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 Oakmark Select 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 Oakmark Select Fund, you can compare the effects of market volatilities on Meridian Contrarian and Oakmark Select 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 Oakmark Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Contrarian and Oakmark Select.
Diversification Opportunities for Meridian Contrarian and Oakmark Select
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MERIDIAN and Oakmark is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Trarian Fund and Oakmark Select Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Select 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 Oakmark Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Select has no effect on the direction of Meridian Contrarian i.e., Meridian Contrarian and Oakmark Select go up and down completely randomly.
Pair Corralation between Meridian Contrarian and Oakmark Select
Assuming the 90 days horizon Meridian Contrarian is expected to generate 1.41 times less return on investment than Oakmark Select. In addition to that, Meridian Contrarian is 1.14 times more volatile than Oakmark Select Fund. It trades about 0.1 of its total potential returns per unit of risk. Oakmark Select Fund is currently generating about 0.16 per unit of volatility. If you would invest 7,011 in Oakmark Select Fund on August 29, 2024 and sell it today you would earn a total of 1,453 from holding Oakmark Select Fund or generate 20.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meridian Trarian Fund vs. Oakmark Select Fund
Performance |
| Timeline |
| Meridian Contrarian |
| Oakmark Select |
Meridian Contrarian and Oakmark Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Contrarian and Oakmark Select
The main advantage of trading using opposite Meridian Contrarian and Oakmark Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Contrarian position performs unexpectedly, Oakmark Select 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 Oakmark Select will offset losses from the drop in Oakmark Select'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 |
| Oakmark Select vs. Value Fund Investor | Oakmark Select vs. HUMANA INC | Oakmark Select vs. Aquagold International | Oakmark Select vs. Barloworld Ltd ADR |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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