Correlation Between Pro-blend(r) Conservative and Manning Napier
Can any of the company-specific risk be diversified away by investing in both Pro-blend(r) Conservative 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) Conservative 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 Servative Term and Manning Napier Pro Blend, you can compare the effects of market volatilities on Pro-blend(r) Conservative 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) Conservative with a short position of Manning Napier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro-blend(r) Conservative and Manning Napier.
Diversification Opportunities for Pro-blend(r) Conservative and Manning Napier
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pro-blend(r) and Manning is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Pro Blend Servative Term and Manning Napier Pro Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier Pro and Pro-blend(r) Conservative 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 Servative 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 Pro has no effect on the direction of Pro-blend(r) Conservative i.e., Pro-blend(r) Conservative and Manning Napier go up and down completely randomly.
Pair Corralation between Pro-blend(r) Conservative and Manning Napier
Assuming the 90 days horizon Pro-blend(r) Conservative is expected to generate 1.68 times less return on investment than Manning Napier. But when comparing it to its historical volatility, Pro Blend Servative Term is 1.5 times less risky than Manning Napier. It trades about 0.08 of its potential returns per unit of risk. Manning Napier Pro Blend is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,664 in Manning Napier Pro Blend on August 27, 2024 and sell it today you would earn a total of 388.00 from holding Manning Napier Pro Blend or generate 23.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pro Blend Servative Term vs. Manning Napier Pro Blend
Performance |
| Timeline |
| Pro-blend(r) Conservative |
| Manning Napier Pro |
Pro-blend(r) Conservative and Manning Napier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pro-blend(r) Conservative and Manning Napier
The main advantage of trading using opposite Pro-blend(r) Conservative and Manning Napier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro-blend(r) Conservative 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.The idea behind Pro Blend Servative Term and Manning Napier Pro Blend pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Manning Napier vs. Pro Blend Moderate Term | Manning Napier vs. Pro Blend Maximum Term | Manning Napier vs. Pro Blend Servative Term | Manning Napier vs. Madison Mid Cap |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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