Correlation Between Polen Small and Polen International
Can any of the company-specific risk be diversified away by investing in both Polen Small 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 Small 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 Small and Polen International Growth, you can compare the effects of market volatilities on Polen Small 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 Small with a short position of Polen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polen Small and Polen International.
Diversification Opportunities for Polen Small and Polen International
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polen and Polen is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Polen Small 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 Small 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 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 Small i.e., Polen Small and Polen International go up and down completely randomly.
Pair Corralation between Polen Small and Polen International
Assuming the 90 days horizon Polen Small is expected to generate 1.41 times more return on investment than Polen International. However, Polen Small is 1.41 times more volatile than Polen International Growth. It trades about 0.05 of its potential returns per unit of risk. Polen International Growth is currently generating about 0.03 per unit of risk. 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polen Small vs. Polen International Growth
Performance |
| Timeline |
| Polen Small |
| Polen International |
Polen Small and Polen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polen Small and Polen International
The main advantage of trading using opposite Polen Small and Polen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polen Small 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 Small vs. Ashmore Emerging Markets | Polen Small vs. Legg Mason Partners | Polen Small vs. Meeder Funds | Polen Small vs. Dws Government Money |
| Polen International vs. Polen Growth Fund | Polen International vs. Congress Mid Cap | Polen International vs. Polen Global Growth | Polen International vs. Polen Small Pany |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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