Correlation Between Ancora/thelen Small-mid and Meridian Growth

Can any of the company-specific risk be diversified away by investing in both Ancora/thelen Small-mid 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 Ancora/thelen Small-mid and Meridian Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ancorathelen Small Mid Cap and Meridian Growth Fund, you can compare the effects of market volatilities on Ancora/thelen Small-mid 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 Ancora/thelen Small-mid with a short position of Meridian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ancora/thelen Small-mid and Meridian Growth.

Diversification Opportunities for Ancora/thelen Small-mid and Meridian Growth

0.8

Correlation Coefficient

Ancora/thelen Small-mid  Meridian Growth

Very poor diversification

The 3 months correlation between Ancora/thelen and Meridian is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ancorathelen Small Mid Cap and Meridian Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Growth and Ancora/thelen Small-mid 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 Ancorathelen Small Mid Cap 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 Ancora/thelen Small-mid i.e., Ancora/thelen Small-mid and Meridian Growth go up and down completely randomly.

Pair Corralation between Ancora/thelen Small-mid and Meridian Growth

Assuming the 90 days horizon Ancorathelen Small Mid Cap is expected to under-perform the Meridian Growth. In addition to that, Ancora/thelen Small-mid is 1.29 times more volatile than Meridian Growth Fund. It trades about -0.13 of its total potential returns per unit of risk. Meridian Growth Fund is currently generating about -0.08 per unit of volatility. If you would invest  3,703  in Meridian Growth Fund on December 26, 2024 and sell it today you would lose (214.00) from holding Meridian Growth Fund or give up 5.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Ancorathelen Small Mid Cap  vs.  Meridian Growth Fund

Ancora/thelen Small-mid

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ancorathelen Small Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Meridian Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meridian Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Meridian Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ancora/thelen Small-mid and Meridian Growth

The main advantage of trading using opposite Ancora/thelen Small-mid and Meridian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ancora/thelen Small-mid 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.

The idea behind Ancorathelen Small Mid Cap and Meridian Growth Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.