Correlation Between Polen International and Wcm Focused
Can any of the company-specific risk be diversified away by investing in both Polen International and Wcm Focused 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 Wcm Focused 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 Wcm Focused International, you can compare the effects of market volatilities on Polen International and Wcm Focused 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 Wcm Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polen International and Wcm Focused.
Diversification Opportunities for Polen International and Wcm Focused
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Polen and Wcm is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Polen International Growth and Wcm Focused International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wcm Focused International 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 Wcm Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wcm Focused International has no effect on the direction of Polen International i.e., Polen International and Wcm Focused go up and down completely randomly.
Pair Corralation between Polen International and Wcm Focused
Assuming the 90 days horizon Polen International is expected to generate 1.63 times less return on investment than Wcm Focused. But when comparing it to its historical volatility, Polen International Growth is 1.0 times less risky than Wcm Focused. It trades about 0.03 of its potential returns per unit of risk. Wcm Focused International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,206 in Wcm Focused International on September 2, 2024 and sell it today you would earn a total of 384.00 from holding Wcm Focused International or generate 17.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polen International Growth vs. Wcm Focused International
Performance |
| Timeline |
| Polen International |
| Wcm Focused International |
Polen International and Wcm Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polen International and Wcm Focused
The main advantage of trading using opposite Polen International and Wcm Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polen International position performs unexpectedly, Wcm Focused 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 Wcm Focused will offset losses from the drop in Wcm Focused'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 |
| Wcm Focused vs. Allianzgi Technology Fund | Wcm Focused vs. Towpath Technology | Wcm Focused vs. Technology Ultrasector Profund | Wcm Focused vs. Goldman Sachs Technology |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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