Correlation Between Brown Advisory and Meeder Funds

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

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

Diversification Opportunities for Brown Advisory and Meeder Funds

0.54

Correlation Coefficient

Brown Advisory  Meeder Funds

Very weak diversification

The 3 months correlation between Brown and Meeder is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Brown Advisory Small Cap and Meeder Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meeder Funds and Brown Advisory 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 Brown Advisory Small Cap 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 Brown Advisory i.e., Brown Advisory and Meeder Funds go up and down completely randomly.

Pair Corralation between Brown Advisory and Meeder Funds

Assuming the 90 days horizon Brown Advisory Small Cap is expected to generate 7.56 times more return on investment than Meeder Funds. However, Brown Advisory is 7.56 times more volatile than Meeder Funds . It trades about 0.14 of its potential returns per unit of risk. Meeder Funds is currently generating about 0.13 per unit of risk. If you would invest  4,671  in Brown Advisory Small Cap on September 1, 2024 and sell it today you would earn a total of  420.00  from holding Brown Advisory Small Cap or generate 8.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Brown Advisory Small Cap  vs.  Meeder Funds

Brown Advisory Small

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brown Advisory Small Cap are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Brown Advisory 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 Brown Advisory and Meeder Funds

The main advantage of trading using opposite Brown Advisory and Meeder Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brown Advisory 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 Brown Advisory Small Cap 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.

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.