Correlation Between Pro Blend and Manning Napier
Can any of the company-specific risk be diversified away by investing in both Pro Blend and Manning Napier 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 Pro Blend and Manning Napier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pro Blend Extended Term and Manning Napier Credit, you can compare the effects of market volatilities on Pro Blend and Manning Napier 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 Pro Blend with a short position of Manning Napier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro Blend and Manning Napier.
Diversification Opportunities for Pro Blend and Manning Napier
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pro and Manning is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Pro Blend Extended Term and Manning Napier Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier Credit and Pro Blend 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 Pro Blend Extended Term are associated (or correlated) with Manning Napier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manning Napier Credit has no effect on the direction of Pro Blend i.e., Pro Blend and Manning Napier go up and down completely randomly.
Pair Corralation between Pro Blend and Manning Napier
Assuming the 90 days horizon Pro Blend Extended Term is expected to generate 2.03 times more return on investment than Manning Napier. However, Pro Blend is 2.03 times more volatile than Manning Napier Credit. It trades about -0.02 of its potential returns per unit of risk. Manning Napier Credit is currently generating about -0.12 per unit of risk. If you would invest 2,028 in Pro Blend Extended Term on August 26, 2024 and sell it today you would lose (5.00) from holding Pro Blend Extended Term or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pro Blend Extended Term vs. Manning Napier Credit
Performance |
| Timeline |
| Pro Blend Extended |
| Manning Napier Credit |
Pro Blend and Manning Napier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pro Blend and Manning Napier
The main advantage of trading using opposite Pro Blend and Manning Napier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro Blend position performs unexpectedly, Manning Napier 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 Manning Napier will offset losses from the drop in Manning Napier's long position.| Pro Blend vs. Pro Blend Moderate Term | Pro Blend vs. Pro Blend Maximum Term | Pro Blend vs. Pro Blend Servative Term | Pro Blend vs. Madison Mid Cap |
| Manning Napier vs. Manning Napier Callodine | Manning Napier vs. Manning Napier Callodine | Manning Napier vs. Manning Napier Callodine | Manning Napier vs. Pro Blend Extended Term |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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