Correlation Between Meridian Bancorp and Lennar
Can any of the company-specific risk be diversified away by investing in both Meridian Bancorp and Lennar 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 Meridian Bancorp and Lennar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meridian Bancorp and Lennar, you can compare the effects of market volatilities on Meridian Bancorp and Lennar 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 Meridian Bancorp with a short position of Lennar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Bancorp and Lennar.
Diversification Opportunities for Meridian Bancorp and Lennar
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Meridian and Lennar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Bancorp and Lennar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennar and Meridian Bancorp 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 Meridian Bancorp are associated (or correlated) with Lennar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennar has no effect on the direction of Meridian Bancorp i.e., Meridian Bancorp and Lennar go up and down completely randomly.
Pair Corralation between Meridian Bancorp and Lennar
If you would invest (100.00) in Meridian Bancorp on January 19, 2024 and sell it today you would earn a total of 100.00 from holding Meridian Bancorp or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Meridian Bancorp vs. Lennar
Performance |
| Timeline |
| Meridian Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lennar |
Meridian Bancorp and Lennar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meridian Bancorp and Lennar
The main advantage of trading using opposite Meridian Bancorp and Lennar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Bancorp position performs unexpectedly, Lennar 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 Lennar will offset losses from the drop in Lennar's long position.| Meridian Bancorp vs. Pinterest | Meridian Bancorp vs. NETGEAR | Meridian Bancorp vs. NL Industries | Meridian Bancorp vs. Hawkins |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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