Correlation Between Sprott Gold and Meridian Growth
Can any of the company-specific risk be diversified away by investing in both Sprott Gold and Meridian 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 Sprott Gold and Meridian Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Gold Equity and Meridian Growth Fund, you can compare the effects of market volatilities on Sprott Gold and Meridian 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 Sprott Gold with a short position of Meridian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Gold and Meridian Growth.
Diversification Opportunities for Sprott Gold and Meridian Growth
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sprott and Meridian is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Equity and Meridian Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Growth and Sprott Gold 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 Sprott Gold Equity are associated (or correlated) with Meridian Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Growth has no effect on the direction of Sprott Gold i.e., Sprott Gold and Meridian Growth go up and down completely randomly.
Pair Corralation between Sprott Gold and Meridian Growth
Assuming the 90 days horizon Sprott Gold is expected to generate 4.59 times less return on investment than Meridian Growth. In addition to that, Sprott Gold is 1.83 times more volatile than Meridian Growth Fund. It trades about 0.01 of its total potential returns per unit of risk. Meridian Growth Fund is currently generating about 0.12 per unit of volatility. If you would invest 3,641 in Meridian Growth Fund on September 13, 2024 and sell it today you would earn a total of 178.00 from holding Meridian Growth Fund or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Sprott Gold Equity vs. Meridian Growth Fund
Performance |
| Timeline |
| Sprott Gold Equity |
| Meridian Growth |
Sprott Gold and Meridian Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Gold and Meridian Growth
The main advantage of trading using opposite Sprott Gold and Meridian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Gold position performs unexpectedly, Meridian 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 Meridian Growth will offset losses from the drop in Meridian Growth's long position.| Sprott Gold vs. Sprott Junior Gold | Sprott Gold vs. Sprott Gold Miners | Sprott Gold vs. Europac Gold Fund | Sprott Gold vs. US Global GO |
| Meridian Growth vs. Vanguard Small Cap Value | Meridian Growth vs. Fidelity Small Cap | Meridian Growth vs. Applied Finance Explorer | Meridian Growth vs. Royce Opportunity 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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