Correlation Between Polen Global and Edgewood Growth
Can any of the company-specific risk be diversified away by investing in both Polen Global and Edgewood 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 Global and Edgewood Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polen Global Growth and Edgewood Growth Fund, you can compare the effects of market volatilities on Polen Global and Edgewood 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 Global with a short position of Edgewood Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polen Global and Edgewood Growth.
Diversification Opportunities for Polen Global and Edgewood Growth
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Polen and Edgewood is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Polen Global Growth and Edgewood Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewood Growth and Polen Global 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 Global Growth are associated (or correlated) with Edgewood Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewood Growth has no effect on the direction of Polen Global i.e., Polen Global and Edgewood Growth go up and down completely randomly.
Pair Corralation between Polen Global and Edgewood Growth
Assuming the 90 days horizon Polen Global Growth is expected to generate 0.9 times more return on investment than Edgewood Growth. However, Polen Global Growth is 1.11 times less risky than Edgewood Growth. It trades about 0.26 of its potential returns per unit of risk. Edgewood Growth Fund is currently generating about 0.13 per unit of risk. If you would invest 2,602 in Polen Global Growth on August 30, 2024 and sell it today you would earn a total of 138.00 from holding Polen Global Growth or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polen Global Growth vs. Edgewood Growth Fund
Performance |
| Timeline |
| Polen Global Growth |
| Edgewood Growth |
Polen Global and Edgewood Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polen Global and Edgewood Growth
The main advantage of trading using opposite Polen Global and Edgewood Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polen Global position performs unexpectedly, Edgewood 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 Edgewood Growth will offset losses from the drop in Edgewood Growth's long position.| Polen Global vs. Polen Growth Fund | Polen Global vs. Baron Global Advantage | Polen Global vs. Polen Growth Fund | Polen Global vs. Polen Global Growth |
| Edgewood Growth vs. Edgewood Growth Fund | Edgewood Growth vs. Polen Growth Fund | Edgewood Growth vs. Doubleline Shiller Enhanced | Edgewood Growth vs. Parnassus Endeavor Fund |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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