Correlation Between Chestnut Street and Meeder Funds

Can any of the company-specific risk be diversified away by investing in both Chestnut Street and Meeder Funds 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 Chestnut Street and Meeder Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chestnut Street Exchange and Meeder Funds , you can compare the effects of market volatilities on Chestnut Street and Meeder Funds 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 Chestnut Street with a short position of Meeder Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chestnut Street and Meeder Funds.

Diversification Opportunities for Chestnut Street and Meeder Funds

0.72

Correlation Coefficient

Chestnut Street  Meeder Funds

Poor diversification

The 3 months correlation between Chestnut and Meeder is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chestnut Street Exchange and Meeder Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meeder Funds and Chestnut Street 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 Chestnut Street Exchange are associated (or correlated) with Meeder Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meeder Funds has no effect on the direction of Chestnut Street i.e., Chestnut Street and Meeder Funds go up and down completely randomly.

Pair Corralation between Chestnut Street and Meeder Funds

Assuming the 90 days horizon Chestnut Street is expected to generate 10.74 times less return on investment than Meeder Funds. But when comparing it to its historical volatility, Chestnut Street Exchange is 27.68 times less risky than Meeder Funds. It trades about 0.1 of its potential returns per unit of risk. Meeder Funds is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  91.00  in Meeder Funds on August 31, 2024 and sell it today you would earn a total of  9.00  from holding Meeder Funds or generate 9.89% return on investment over 90 days.

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

Chestnut Street Exchange  vs.  Meeder Funds

Chestnut Street Exchange

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chestnut Street Exchange are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Chestnut Street may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Meeder Funds

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Meeder Funds are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Meeder Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chestnut Street and Meeder Funds

The main advantage of trading using opposite Chestnut Street and Meeder Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chestnut Street position performs unexpectedly, Meeder Funds 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 Meeder Funds will offset losses from the drop in Meeder Funds' long position.

The idea behind Chestnut Street Exchange and Meeder Funds 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.