Correlation Between Meridianlink and CoreCard Corp

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

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

Diversification Opportunities for Meridianlink and CoreCard Corp

-0.61

Correlation Coefficient

Meridianlink  CoreCard Corp

Excellent diversification

The 3 months correlation between Meridianlink and CoreCard is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Meridianlink and CoreCard Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreCard Corp and Meridianlink 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 Meridianlink are associated (or correlated) with CoreCard Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoreCard Corp has no effect on the direction of Meridianlink i.e., Meridianlink and CoreCard Corp go up and down completely randomly.

Pair Corralation between Meridianlink and CoreCard Corp

Given the investment horizon of 90 days Meridianlink is expected to generate 0.7 times more return on investment than CoreCard Corp. However, Meridianlink is 1.43 times less risky than CoreCard Corp. It trades about 0.03 of its potential returns per unit of risk. CoreCard Corp is currently generating about 0.0 per unit of risk. If you would invest  1,562  in Meridianlink on November 20, 2024 and sell it today you would earn a total of  335.00  from holding Meridianlink or generate 21.45% return on investment over 90 days.

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

Meridianlink  vs.  CoreCard Corp

Meridianlink

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meridianlink has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

CoreCard Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CoreCard Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, CoreCard Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Meridianlink and CoreCard Corp

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

The idea behind Meridianlink and CoreCard Corp 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.