Correlation Between Mairs Power and Longleaf Partners
Can any of the company-specific risk be diversified away by investing in both Mairs Power and Longleaf Partners 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 Longleaf Partners 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 Longleaf Partners Fund, you can compare the effects of market volatilities on Mairs Power and Longleaf Partners 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 Longleaf Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and Longleaf Partners.
Diversification Opportunities for Mairs Power and Longleaf Partners
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mairs and Longleaf is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Growth and Longleaf Partners Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longleaf Partners 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 Longleaf Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longleaf Partners has no effect on the direction of Mairs Power i.e., Mairs Power and Longleaf Partners go up and down completely randomly.
Pair Corralation between Mairs Power and Longleaf Partners
Assuming the 90 days horizon Mairs Power Growth is expected to generate 1.1 times more return on investment than Longleaf Partners. However, Mairs Power is 1.1 times more volatile than Longleaf Partners Fund. It trades about 0.11 of its potential returns per unit of risk. Longleaf Partners Fund is currently generating about 0.09 per unit of risk. If you would invest 15,593 in Mairs Power Growth on September 1, 2024 and sell it today you would earn a total of 2,747 from holding Mairs Power Growth or generate 17.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mairs Power Growth vs. Longleaf Partners Fund
Performance |
| Timeline |
| Mairs Power Growth |
| Longleaf Partners |
Mairs Power and Longleaf Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mairs Power and Longleaf Partners
The main advantage of trading using opposite Mairs Power and Longleaf Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power position performs unexpectedly, Longleaf Partners 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 Longleaf Partners will offset losses from the drop in Longleaf Partners' 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 |
| Longleaf Partners vs. T Rowe Price | Longleaf Partners vs. Tax Managed Mid Small | Longleaf Partners vs. Principal Lifetime Hybrid | Longleaf Partners vs. Western Asset Diversified |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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