Correlation Between The Jensen and Mairs Power
Can any of the company-specific risk be diversified away by investing in both The Jensen 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 The Jensen and Mairs Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Jensen Portfolio and Mairs Power Growth, you can compare the effects of market volatilities on The Jensen 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 The Jensen with a short position of Mairs Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Jensen and Mairs Power.
Diversification Opportunities for The Jensen and Mairs Power
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between The and Mairs is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding The Jensen Portfolio and Mairs Power Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mairs Power Growth and The Jensen 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 The Jensen Portfolio 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 Growth has no effect on the direction of The Jensen i.e., The Jensen and Mairs Power go up and down completely randomly.
Pair Corralation between The Jensen and Mairs Power
Assuming the 90 days horizon The Jensen is expected to generate 8.26 times less return on investment than Mairs Power. In addition to that, The Jensen is 1.25 times more volatile than Mairs Power Growth. It trades about 0.01 of its total potential returns per unit of risk. Mairs Power Growth is currently generating about 0.1 per unit of volatility. If you would invest 15,998 in Mairs Power Growth on September 3, 2024 and sell it today you would earn a total of 2,342 from holding Mairs Power Growth or generate 14.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Jensen Portfolio vs. Mairs Power Growth
Performance |
| Timeline |
| Jensen Portfolio |
| Mairs Power Growth |
The Jensen and Mairs Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Jensen and Mairs Power
The main advantage of trading using opposite The Jensen and Mairs Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Jensen 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.| The Jensen vs. Clipper Fund Inc | The Jensen vs. Parnassus E Equity | The Jensen vs. Mairs Power Growth | The Jensen vs. Sound Shore Fund |
| Mairs Power vs. Meridian Trarian Fund | Mairs Power vs. Mairs Power Balanced | Mairs Power vs. Clipper Fund Inc | Mairs Power vs. Meridian Growth 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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