Correlation Between Polen Global and Polen Bank
Can any of the company-specific risk be diversified away by investing in both Polen Global and Polen Bank 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 Polen Bank 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 Polen Bank Loan, you can compare the effects of market volatilities on Polen Global and Polen Bank 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 Polen Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polen Global and Polen Bank.
Diversification Opportunities for Polen Global and Polen Bank
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Polen and Polen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Polen Global Growth and Polen Bank Loan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Bank Loan 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 Polen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen Bank Loan has no effect on the direction of Polen Global i.e., Polen Global and Polen Bank go up and down completely randomly.
Pair Corralation between Polen Global and Polen Bank
Assuming the 90 days horizon Polen Global Growth is expected to generate 7.24 times more return on investment than Polen Bank. However, Polen Global is 7.24 times more volatile than Polen Bank Loan. It trades about 0.29 of its potential returns per unit of risk. Polen Bank Loan is currently generating about 0.04 per unit of risk. If you would invest 2,609 in Polen Global Growth on September 2, 2024 and sell it today you would earn a total of 140.00 from holding Polen Global Growth or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polen Global Growth vs. Polen Bank Loan
Performance |
| Timeline |
| Polen Global Growth |
| Polen Bank Loan |
Polen Global and Polen Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polen Global and Polen Bank
The main advantage of trading using opposite Polen Global and Polen Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polen Global position performs unexpectedly, Polen Bank 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 Bank will offset losses from the drop in Polen Bank'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 |
| 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 |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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