Correlation Between Polen Bank and Polen International
Can any of the company-specific risk be diversified away by investing in both Polen Bank and Polen International 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 International 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 International Growth, you can compare the effects of market volatilities on Polen Bank and Polen International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polen Bank and Polen International.
Diversification Opportunities for Polen Bank and Polen International
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Polen and POLEN is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Polen Bank Loan and Polen International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen International has no effect on the direction of Polen Bank i.e., Polen Bank and Polen International go up and down completely randomly.
Pair Corralation between Polen Bank and Polen International
Assuming the 90 days horizon Polen Bank is expected to generate 1.25 times less return on investment than Polen International. But when comparing it to its historical volatility, Polen Bank Loan is 3.84 times less risky than Polen International. It trades about 0.17 of its potential returns per unit of risk. Polen International Growth is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,601 in Polen International Growth on August 30, 2024 and sell it today you would earn a total of 15.00 from holding Polen International Growth or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polen Bank Loan vs. Polen International Growth
Performance |
| Timeline |
| Polen Bank Loan |
| Polen International |
Polen Bank and Polen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polen Bank and Polen International
The main advantage of trading using opposite Polen Bank and Polen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polen Bank position performs unexpectedly, Polen International 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 International will offset losses from the drop in Polen International's long position.| Polen Bank vs. Prnpl Inv Fd | Polen Bank vs. Polen Global Growth | Polen Bank vs. Polen Global Growth | Polen Bank vs. Polen International Growth |
| Polen International vs. Polen Growth Fund | Polen International vs. Polen Growth Fund | Polen International vs. Polen Global Growth | Polen International vs. Polen Small |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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