Correlation Between Polen Us and Stringer Growth
Can any of the company-specific risk be diversified away by investing in both Polen Us and Stringer Growth 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 Us and Stringer Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polen Small Pany and Stringer Growth Fund, you can compare the effects of market volatilities on Polen Us and Stringer Growth 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 Us with a short position of Stringer Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polen Us and Stringer Growth.
Diversification Opportunities for Polen Us and Stringer Growth
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Polen and Stringer is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Polen Small Pany and Stringer Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stringer Growth and Polen Us 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 Small Pany are associated (or correlated) with Stringer Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stringer Growth has no effect on the direction of Polen Us i.e., Polen Us and Stringer Growth go up and down completely randomly.
Pair Corralation between Polen Us and Stringer Growth
Assuming the 90 days horizon Polen Us is expected to generate 1.03 times less return on investment than Stringer Growth. In addition to that, Polen Us is 2.3 times more volatile than Stringer Growth Fund. It trades about 0.03 of its total potential returns per unit of risk. Stringer Growth Fund is currently generating about 0.06 per unit of volatility. If you would invest 1,081 in Stringer Growth Fund on October 25, 2024 and sell it today you would earn a total of 178.00 from holding Stringer Growth Fund or generate 16.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polen Small Pany vs. Stringer Growth Fund
Performance |
| Timeline |
| Polen Small Pany |
| Stringer Growth |
Polen Us and Stringer Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polen Us and Stringer Growth
The main advantage of trading using opposite Polen Us and Stringer Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polen Us position performs unexpectedly, Stringer Growth 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 Stringer Growth will offset losses from the drop in Stringer Growth's long position.| Polen Us vs. Davenport Small Cap | Polen Us vs. Jpmorgan Diversified Fund | Polen Us vs. Vy T Rowe | Polen Us vs. Jhancock Diversified Macro |
| Stringer Growth vs. Transamerica International Equity | Stringer Growth vs. Dreyfusstandish Global Fixed | Stringer Growth vs. Small Cap Equity | Stringer Growth vs. Ab Servative Wealth |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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