Correlation Between Polen International and Polen Global
Can any of the company-specific risk be diversified away by investing in both Polen International and Polen Global 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 Global 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 Global Growth, you can compare the effects of market volatilities on Polen International and Polen Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polen International and Polen Global.
Diversification Opportunities for Polen International and Polen Global
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between POLEN and Polen is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Polen International Growth and Polen Global Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Global Growth 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen Global Growth has no effect on the direction of Polen International i.e., Polen International and Polen Global go up and down completely randomly.
Pair Corralation between Polen International and Polen Global
Assuming the 90 days horizon Polen International is expected to generate 5.03 times less return on investment than Polen Global. But when comparing it to its historical volatility, Polen International Growth is 1.11 times less risky than Polen Global. It trades about 0.06 of its potential returns per unit of risk. Polen Global Growth is currently generating about 0.26 of returns per unit of risk over similar time horizon. 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 Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Polen International Growth vs. Polen Global Growth
Performance |
| Timeline |
| Polen International |
| Polen Global Growth |
Polen International and Polen Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polen International and Polen Global
The main advantage of trading using opposite Polen International and Polen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polen International position performs unexpectedly, Polen Global 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 Global will offset losses from the drop in Polen Global's long position.| Polen International vs. Polen Growth Fund | Polen International vs. Polen Growth Fund | Polen International vs. Polen Global Growth | Polen International vs. Polen Small |
| Polen Global vs. Polen Growth Fund | Polen Global vs. Baron Global Advantage | Polen Global vs. Polen Growth Fund | Polen Global vs. Polen Global 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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