Correlation Between Pro-blend(r) Extended and Manning Napier
Can any of the company-specific risk be diversified away by investing in both Pro-blend(r) Extended 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(r) Extended 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 Overseas, you can compare the effects of market volatilities on Pro-blend(r) Extended 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(r) Extended with a short position of Manning Napier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro-blend(r) Extended and Manning Napier.
Diversification Opportunities for Pro-blend(r) Extended and Manning Napier
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pro-blend(r) and Manning is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Pro Blend Extended Term and Manning Napier Overseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier Overseas and Pro-blend(r) Extended 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 Overseas has no effect on the direction of Pro-blend(r) Extended i.e., Pro-blend(r) Extended and Manning Napier go up and down completely randomly.
Pair Corralation between Pro-blend(r) Extended and Manning Napier
Assuming the 90 days horizon Pro Blend Extended Term is expected to generate 0.55 times more return on investment than Manning Napier. However, Pro Blend Extended Term is 1.83 times less risky than Manning Napier. It trades about 0.09 of its potential returns per unit of risk. Manning Napier Overseas is currently generating about -0.11 per unit of risk. If you would invest 2,027 in Pro Blend Extended Term on August 30, 2024 and sell it today you would earn a total of 19.00 from holding Pro Blend Extended Term or generate 0.94% return on investment 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 Overseas
Performance |
| Timeline |
| Pro-blend(r) Extended |
| Manning Napier Overseas |
Pro-blend(r) Extended and Manning Napier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pro-blend(r) Extended and Manning Napier
The main advantage of trading using opposite Pro-blend(r) Extended and Manning Napier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro-blend(r) Extended 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(r) Extended vs. Pro Blend Moderate Term | Pro-blend(r) Extended vs. Pro Blend Maximum Term | Pro-blend(r) Extended vs. Pro Blend Servative Term | Pro-blend(r) Extended vs. Madison Mid Cap |
| Manning Napier vs. Old Westbury Short Term | Manning Napier vs. Touchstone Ultra Short | Manning Napier vs. Barings Active Short | Manning Napier vs. Federated Short Intermediate Duration |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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