Correlation Between Goodhaven Fund and Polen International
Can any of the company-specific risk be diversified away by investing in both Goodhaven Fund 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 Goodhaven Fund and Polen International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodhaven Fund Goodhaven and Polen International Growth, you can compare the effects of market volatilities on Goodhaven Fund 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 Goodhaven Fund with a short position of Polen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodhaven Fund and Polen International.
Diversification Opportunities for Goodhaven Fund and Polen International
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goodhaven and Polen is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Goodhaven Fund Goodhaven and Polen International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen International and Goodhaven Fund 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 Goodhaven Fund Goodhaven 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 Goodhaven Fund i.e., Goodhaven Fund and Polen International go up and down completely randomly.
Pair Corralation between Goodhaven Fund and Polen International
Assuming the 90 days horizon Goodhaven Fund Goodhaven is expected to generate 0.78 times more return on investment than Polen International. However, Goodhaven Fund Goodhaven is 1.28 times less risky than Polen International. It trades about 0.15 of its potential returns per unit of risk. Polen International Growth is currently generating about 0.03 per unit of risk. If you would invest 3,673 in Goodhaven Fund Goodhaven on September 2, 2024 and sell it today you would earn a total of 1,630 from holding Goodhaven Fund Goodhaven or generate 44.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodhaven Fund Goodhaven vs. Polen International Growth
Performance |
| Timeline |
| Goodhaven Fund Goodhaven |
| Polen International |
Goodhaven Fund and Polen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodhaven Fund and Polen International
The main advantage of trading using opposite Goodhaven Fund and Polen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodhaven Fund 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.| Goodhaven Fund vs. Western Asset Diversified | Goodhaven Fund vs. Jhancock Diversified Macro | Goodhaven Fund vs. American Century Diversified | Goodhaven Fund vs. Tiaa Cref Smallmid Cap Equity |
| Polen International vs. Polen Growth Fund | Polen International vs. Congress Mid Cap | Polen International vs. Polen Global Growth | Polen International vs. Zacks Dividend 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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