Correlation Between New Perspective and Polen Global
Can any of the company-specific risk be diversified away by investing in both New Perspective and Polen Global 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 New Perspective and Polen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Perspective Fund and Polen Global Growth, you can compare the effects of market volatilities on New Perspective and Polen Global 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 New Perspective with a short position of Polen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Polen Global.
Diversification Opportunities for New Perspective and Polen Global
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between New and Polen is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund and Polen Global Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Global Growth and New Perspective 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 New Perspective Fund are associated (or correlated) with Polen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen Global Growth has no effect on the direction of New Perspective i.e., New Perspective and Polen Global go up and down completely randomly.
Pair Corralation between New Perspective and Polen Global
Assuming the 90 days horizon New Perspective Fund is expected to generate 0.66 times more return on investment than Polen Global. However, New Perspective Fund is 1.52 times less risky than Polen Global. It trades about 0.23 of its potential returns per unit of risk. Polen Global Growth is currently generating about -0.06 per unit of risk. If you would invest 6,145 in New Perspective Fund on September 13, 2024 and sell it today you would earn a total of 171.00 from holding New Perspective Fund or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Perspective Fund vs. Polen Global Growth
Performance |
| Timeline |
| New Perspective |
| Polen Global Growth |
New Perspective and Polen Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and Polen Global
The main advantage of trading using opposite New Perspective and Polen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective position performs unexpectedly, Polen Global 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 Polen Global will offset losses from the drop in Polen Global's long position.| New Perspective vs. Income Fund Of | New Perspective vs. New World Fund | New Perspective vs. American Mutual Fund | New Perspective vs. American Mutual Fund |
| Polen Global vs. Putnam Multi Cap Growth | Polen Global vs. Polen Growth Fund | Polen Global vs. Putnam Global Equity | Polen Global vs. Putnam International Equity |
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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