Correlation Between Polen International and Polen Bank
Can any of the company-specific risk be diversified away by investing in both Polen International 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 International 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 International Growth and Polen Bank Loan, you can compare the effects of market volatilities on Polen International 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 International with a short position of Polen Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polen International and Polen Bank.
Diversification Opportunities for Polen International and Polen Bank
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between POLEN and Polen is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Polen International 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 International 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 International 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 International i.e., Polen International and Polen Bank go up and down completely randomly.
Pair Corralation between Polen International and Polen Bank
Assuming the 90 days horizon Polen International Growth is expected to generate 4.17 times more return on investment than Polen Bank. However, Polen International is 4.17 times more volatile than Polen Bank Loan. It trades about 0.05 of its potential returns per unit of risk. Polen Bank Loan is currently generating about 0.18 per unit of risk. If you would invest 1,370 in Polen International Growth on November 28, 2024 and sell it today you would earn a total of 302.00 from holding Polen International Growth or generate 22.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polen International Growth vs. Polen Bank Loan
Performance |
| Timeline |
| Polen International |
| Polen Bank Loan |
Polen International and Polen Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polen International and Polen Bank
The main advantage of trading using opposite Polen International and Polen Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polen International 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 International vs. Polen Growth Fund | Polen International vs. Congress Mid Cap | Polen International vs. Polen Global Growth | Polen International vs. Zacks Dividend Fund |
| Polen Bank vs. Prnpl Inv Fd | Polen Bank vs. Polen Global Growth | Polen Bank vs. Polen Global Growth | Polen Bank vs. Polen International Growth |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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