Correlation Between Origin Emerging and Meridian Equity
Can any of the company-specific risk be diversified away by investing in both Origin Emerging and Meridian Equity 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 Origin Emerging and Meridian Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Emerging Markets and Meridian Equity Income, you can compare the effects of market volatilities on Origin Emerging and Meridian Equity 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 Origin Emerging with a short position of Meridian Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Emerging and Meridian Equity.
Diversification Opportunities for Origin Emerging and Meridian Equity
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and MERIDIAN is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Origin Emerging Markets and Meridian Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Equity Income and Origin Emerging 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 Origin Emerging Markets are associated (or correlated) with Meridian Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Equity Income has no effect on the direction of Origin Emerging i.e., Origin Emerging and Meridian Equity go up and down completely randomly.
Pair Corralation between Origin Emerging and Meridian Equity
Assuming the 90 days horizon Origin Emerging is expected to generate 1.91 times less return on investment than Meridian Equity. In addition to that, Origin Emerging is 1.44 times more volatile than Meridian Equity Income. It trades about 0.03 of its total potential returns per unit of risk. Meridian Equity Income is currently generating about 0.09 per unit of volatility. If you would invest 1,096 in Meridian Equity Income on September 3, 2024 and sell it today you would earn a total of 329.00 from holding Meridian Equity Income or generate 30.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Emerging Markets vs. Meridian Equity Income
Performance |
| Timeline |
| Origin Emerging Markets |
| Meridian Equity Income |
Origin Emerging and Meridian Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Emerging and Meridian Equity
The main advantage of trading using opposite Origin Emerging and Meridian Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Emerging position performs unexpectedly, Meridian Equity 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 Meridian Equity will offset losses from the drop in Meridian Equity's long position.| Origin Emerging vs. Blackrock Financial Institutions | Origin Emerging vs. Mesirow Financial Small | Origin Emerging vs. Angel Oak Financial | Origin Emerging vs. Icon Financial Fund |
| Meridian Equity vs. Alpine High Yield | Meridian Equity vs. Pace High Yield | Meridian Equity vs. Guggenheim High Yield | Meridian Equity vs. Lord Abbett High |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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