Correlation Between Polen Bank and Polen Small
Can any of the company-specific risk be diversified away by investing in both Polen Bank and Polen Small 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 Polen Bank and Polen Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polen Bank Loan and Polen Small, you can compare the effects of market volatilities on Polen Bank and Polen Small 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 Polen Bank with a short position of Polen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polen Bank and Polen Small.
Diversification Opportunities for Polen Bank and Polen Small
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Polen and Polen is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Polen Bank Loan and Polen Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Small and Polen Bank 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 Polen Bank Loan are associated (or correlated) with Polen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen Small has no effect on the direction of Polen Bank i.e., Polen Bank and Polen Small go up and down completely randomly.
Pair Corralation between Polen Bank and Polen Small
Assuming the 90 days horizon Polen Bank is expected to generate 1.41 times less return on investment than Polen Small. But when comparing it to its historical volatility, Polen Bank Loan is 6.38 times less risky than Polen Small. It trades about 0.22 of its potential returns per unit of risk. Polen Small is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,308 in Polen Small on September 2, 2024 and sell it today you would earn a total of 288.00 from holding Polen Small or generate 22.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polen Bank Loan vs. Polen Small
Performance |
| Timeline |
| Polen Bank Loan |
| Polen Small |
Polen Bank and Polen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polen Bank and Polen Small
The main advantage of trading using opposite Polen Bank and Polen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polen Bank position performs unexpectedly, Polen Small 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 Small will offset losses from the drop in Polen Small's long position.| Polen Bank vs. Absolute Convertible Arbitrage | Polen Bank vs. Putnam Convertible Incm Gwth | Polen Bank vs. Columbia Vertible Securities | Polen Bank vs. The Gamco Global |
| Polen Small vs. Ashmore Emerging Markets | Polen Small vs. Legg Mason Partners | Polen Small vs. Meeder Funds | Polen Small vs. Dws Government Money |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |