Correlation Between Mairs Power and Target Retirement
Can any of the company-specific risk be diversified away by investing in both Mairs Power and Target Retirement 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 Target Retirement 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 Target Retirement 2040, you can compare the effects of market volatilities on Mairs Power and Target Retirement 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 Target Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and Target Retirement.
Diversification Opportunities for Mairs Power and Target Retirement
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mairs and Target is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Growth and Target Retirement 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Retirement 2040 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 Target Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Retirement 2040 has no effect on the direction of Mairs Power i.e., Mairs Power and Target Retirement go up and down completely randomly.
Pair Corralation between Mairs Power and Target Retirement
Assuming the 90 days horizon Mairs Power Growth is expected to generate 1.38 times more return on investment than Target Retirement. However, Mairs Power is 1.38 times more volatile than Target Retirement 2040. It trades about 0.08 of its potential returns per unit of risk. Target Retirement 2040 is currently generating about 0.07 per unit of risk. If you would invest 12,575 in Mairs Power Growth on October 30, 2024 and sell it today you would earn a total of 4,851 from holding Mairs Power Growth or generate 38.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Mairs Power Growth vs. Target Retirement 2040
Performance |
| Timeline |
| Mairs Power Growth |
| Target Retirement 2040 |
Mairs Power and Target Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mairs Power and Target Retirement
The main advantage of trading using opposite Mairs Power and Target Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power position performs unexpectedly, Target Retirement 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 Target Retirement will offset losses from the drop in Target Retirement'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 |
| Target Retirement vs. Siit High Yield | Target Retirement vs. Virtus High Yield | Target Retirement vs. Gmo High Yield | Target Retirement vs. Access Flex High |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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