Correlation Between Mairs Power and International Fund
Can any of the company-specific risk be diversified away by investing in both Mairs Power and International Fund 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 Mairs Power and International Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mairs Power Balanced and International Fund International, you can compare the effects of market volatilities on Mairs Power and International Fund 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 Mairs Power with a short position of International Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and International Fund.
Diversification Opportunities for Mairs Power and International Fund
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mairs and International is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Balanced and International Fund Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Fund and Mairs Power 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 Mairs Power Balanced are associated (or correlated) with International Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Fund has no effect on the direction of Mairs Power i.e., Mairs Power and International Fund go up and down completely randomly.
Pair Corralation between Mairs Power and International Fund
Assuming the 90 days horizon Mairs Power Balanced is expected to generate 0.83 times more return on investment than International Fund. However, Mairs Power Balanced is 1.2 times less risky than International Fund. It trades about 0.21 of its potential returns per unit of risk. International Fund International is currently generating about 0.09 per unit of risk. If you would invest 11,085 in Mairs Power Balanced on August 29, 2024 and sell it today you would earn a total of 323.00 from holding Mairs Power Balanced or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mairs Power Balanced vs. International Fund Internation
Performance |
| Timeline |
| Mairs Power Balanced |
| International Fund |
Mairs Power and International Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mairs Power and International Fund
The main advantage of trading using opposite Mairs Power and International Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power position performs unexpectedly, International Fund 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 International Fund will offset losses from the drop in International Fund's long position.| Mairs Power vs. American Balanced Fund | Mairs Power vs. American Balanced Fund | Mairs Power vs. HUMANA INC | Mairs Power vs. Aquagold International |
| International Fund vs. Large Cap Growth | International Fund vs. Parnassus Mid Cap | International Fund vs. Parnassus E Equity | International Fund vs. Doubleline Total Return |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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