Correlation Between Sgi Prudent and Meridian Equity
Can any of the company-specific risk be diversified away by investing in both Sgi Prudent 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 Sgi Prudent and Meridian Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sgi Prudent Growth and Meridian Equity Income, you can compare the effects of market volatilities on Sgi Prudent 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 Sgi Prudent with a short position of Meridian Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sgi Prudent and Meridian Equity.
Diversification Opportunities for Sgi Prudent and Meridian Equity
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sgi and Meridian is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sgi Prudent Growth 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 Sgi Prudent 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 Sgi Prudent Growth 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 Sgi Prudent i.e., Sgi Prudent and Meridian Equity go up and down completely randomly.
Pair Corralation between Sgi Prudent and Meridian Equity
Assuming the 90 days horizon Sgi Prudent Growth is expected to generate 1.08 times more return on investment than Meridian Equity. However, Sgi Prudent is 1.08 times more volatile than Meridian Equity Income. It trades about 0.4 of its potential returns per unit of risk. Meridian Equity Income is currently generating about 0.26 per unit of risk. If you would invest 1,170 in Sgi Prudent Growth on September 1, 2024 and sell it today you would earn a total of 53.00 from holding Sgi Prudent Growth or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sgi Prudent Growth vs. Meridian Equity Income
Performance |
| Timeline |
| Sgi Prudent Growth |
| Meridian Equity Income |
Sgi Prudent and Meridian Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sgi Prudent and Meridian Equity
The main advantage of trading using opposite Sgi Prudent and Meridian Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sgi Prudent 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.| Sgi Prudent vs. Summit Global Investments | Sgi Prudent vs. Summit Global Investments | Sgi Prudent vs. Sgi Peak Growth | Sgi Prudent vs. Summit Global Investments |
| Meridian Equity vs. Legg Mason Partners | Meridian Equity vs. Fidelity Capital Income | Meridian Equity vs. Western Asset High | Meridian Equity vs. American Century 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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