Correlation Between Europacific Growth and Polen International
Can any of the company-specific risk be diversified away by investing in both Europacific Growth and Polen International 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 Europacific Growth and Polen International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europacific Growth Fund and Polen International Growth, you can compare the effects of market volatilities on Europacific Growth and Polen International 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 Europacific Growth with a short position of Polen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and Polen International.
Diversification Opportunities for Europacific Growth and Polen International
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Europacific and Polen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth Fund and Polen International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen International and Europacific Growth 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 Europacific Growth Fund are associated (or correlated) with Polen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen International has no effect on the direction of Europacific Growth i.e., Europacific Growth and Polen International go up and down completely randomly.
Pair Corralation between Europacific Growth and Polen International
Assuming the 90 days horizon Europacific Growth is expected to generate 1.38 times less return on investment than Polen International. But when comparing it to its historical volatility, Europacific Growth Fund is 1.09 times less risky than Polen International. It trades about 0.03 of its potential returns per unit of risk. Polen International Growth is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,480 in Polen International Growth on September 2, 2024 and sell it today you would earn a total of 144.00 from holding Polen International Growth or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europacific Growth Fund vs. Polen International Growth
Performance |
| Timeline |
| Europacific Growth |
| Polen International |
Europacific Growth and Polen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europacific Growth and Polen International
The main advantage of trading using opposite Europacific Growth and Polen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth position performs unexpectedly, Polen International 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 Polen International will offset losses from the drop in Polen International's long position.| Europacific Growth vs. Moderately Aggressive Balanced | Europacific Growth vs. Qs Moderate Growth | Europacific Growth vs. Calvert Moderate Allocation | Europacific Growth vs. Multimanager Lifestyle Moderate |
| Polen International vs. Polen Growth Fund | Polen International vs. Congress Mid Cap | Polen International vs. Polen Global Growth | Polen International vs. Polen Small Pany |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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