Correlation Between Berwyn Income and Mairs Power
Can any of the company-specific risk be diversified away by investing in both Berwyn Income and Mairs Power 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 Berwyn Income and Mairs Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berwyn Income Fund and Mairs Power Balanced, you can compare the effects of market volatilities on Berwyn Income and Mairs Power 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 Berwyn Income with a short position of Mairs Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berwyn Income and Mairs Power.
Diversification Opportunities for Berwyn Income and Mairs Power
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Berwyn and Mairs is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Berwyn Income Fund and Mairs Power Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mairs Power Balanced and Berwyn Income 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 Berwyn Income Fund are associated (or correlated) with Mairs Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mairs Power Balanced has no effect on the direction of Berwyn Income i.e., Berwyn Income and Mairs Power go up and down completely randomly.
Pair Corralation between Berwyn Income and Mairs Power
Assuming the 90 days horizon Berwyn Income is expected to generate 1.63 times less return on investment than Mairs Power. But when comparing it to its historical volatility, Berwyn Income Fund is 1.47 times less risky than Mairs Power. It trades about 0.08 of its potential returns per unit of risk. Mairs Power Balanced is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9,052 in Mairs Power Balanced on August 26, 2024 and sell it today you would earn a total of 2,248 from holding Mairs Power Balanced or generate 24.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berwyn Income Fund vs. Mairs Power Balanced
Performance |
| Timeline |
| Berwyn Income |
| Mairs Power Balanced |
Berwyn Income and Mairs Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berwyn Income and Mairs Power
The main advantage of trading using opposite Berwyn Income and Mairs Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berwyn Income position performs unexpectedly, Mairs Power 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 Mairs Power will offset losses from the drop in Mairs Power's long position.| Berwyn Income vs. Western Asset Municipal | Berwyn Income vs. Scharf Global Opportunity | Berwyn Income vs. Aam Select Income | Berwyn Income vs. Balanced Fund Investor |
| Mairs Power vs. Mairs Power Growth | Mairs Power vs. Mairs Power Small | Mairs Power vs. Berwyn Income Fund | Mairs Power vs. Fpa Crescent Fund |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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