Correlation Between Meridian Contrarian and Value Fund
Can any of the company-specific risk be diversified away by investing in both Meridian Contrarian and Value Fund 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 Value Fund 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 Value Fund Value, you can compare the effects of market volatilities on Meridian Contrarian and Value Fund 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 Value Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Contrarian and Value Fund.
Diversification Opportunities for Meridian Contrarian and Value Fund
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Meridian and Value is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Trarian Fund and Value Fund Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Fund Value 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 Value Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Fund Value has no effect on the direction of Meridian Contrarian i.e., Meridian Contrarian and Value Fund go up and down completely randomly.
Pair Corralation between Meridian Contrarian and Value Fund
Assuming the 90 days horizon Meridian Trarian Fund is expected to generate 1.26 times more return on investment than Value Fund. However, Meridian Contrarian is 1.26 times more volatile than Value Fund Value. It trades about 0.08 of its potential returns per unit of risk. Value Fund Value is currently generating about 0.08 per unit of risk. If you would invest 3,709 in Meridian Trarian Fund on September 1, 2024 and sell it today you would earn a total of 566.00 from holding Meridian Trarian Fund or generate 15.26% 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. Value Fund Value
Performance |
| Timeline |
| Meridian Contrarian |
| Value Fund Value |
Meridian Contrarian and Value Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Contrarian and Value Fund
The main advantage of trading using opposite Meridian Contrarian and Value Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Contrarian position performs unexpectedly, Value Fund 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 Value Fund will offset losses from the drop in Value Fund'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 |
| Value Fund vs. Partners Value Fund | Value Fund vs. Clipper Fund Inc | Value Fund vs. Longleaf Partners Fund | Value Fund vs. Third Avenue Value |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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