Correlation Between Mairs Power and Aam/himco Short
Can any of the company-specific risk be diversified away by investing in both Mairs Power and Aam/himco Short 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 Aam/himco Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mairs Power Growth and Aamhimco Short Duration, you can compare the effects of market volatilities on Mairs Power and Aam/himco Short 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 Aam/himco Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and Aam/himco Short.
Diversification Opportunities for Mairs Power and Aam/himco Short
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mairs and Aam/himco is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Growth and Aamhimco Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aamhimco Short Duration 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 Growth are associated (or correlated) with Aam/himco Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aamhimco Short Duration has no effect on the direction of Mairs Power i.e., Mairs Power and Aam/himco Short go up and down completely randomly.
Pair Corralation between Mairs Power and Aam/himco Short
Assuming the 90 days horizon Mairs Power Growth is expected to generate 10.54 times more return on investment than Aam/himco Short. However, Mairs Power is 10.54 times more volatile than Aamhimco Short Duration. It trades about 0.09 of its potential returns per unit of risk. Aamhimco Short Duration is currently generating about 0.25 per unit of risk. If you would invest 11,985 in Mairs Power Growth on October 11, 2024 and sell it today you would earn a total of 5,232 from holding Mairs Power Growth or generate 43.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mairs Power Growth vs. Aamhimco Short Duration
Performance |
| Timeline |
| Mairs Power Growth |
| Aamhimco Short Duration |
Mairs Power and Aam/himco Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mairs Power and Aam/himco Short
The main advantage of trading using opposite Mairs Power and Aam/himco Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power position performs unexpectedly, Aam/himco Short 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 Aam/himco Short will offset losses from the drop in Aam/himco Short's long position.| Mairs Power vs. Meridian Trarian Fund | Mairs Power vs. Mairs Power Balanced | Mairs Power vs. Clipper Fund Inc | Mairs Power vs. Meridian Growth Fund |
| Aam/himco Short vs. L Abbett Growth | Aam/himco Short vs. Mairs Power Growth | Aam/himco Short vs. Morningstar Aggressive Growth | Aam/himco Short vs. Transamerica Capital Growth |
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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