Correlation Between Polen Growth and Congress Mid
Can any of the company-specific risk be diversified away by investing in both Polen Growth and Congress Mid 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 Growth and Congress Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polen Growth Fund and Congress Mid Cap, you can compare the effects of market volatilities on Polen Growth and Congress Mid 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 Growth with a short position of Congress Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polen Growth and Congress Mid.
Diversification Opportunities for Polen Growth and Congress Mid
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Polen and Congress is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Polen Growth Fund and Congress Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Congress Mid Cap and Polen Growth 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 Growth Fund are associated (or correlated) with Congress Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Congress Mid Cap has no effect on the direction of Polen Growth i.e., Polen Growth and Congress Mid go up and down completely randomly.
Pair Corralation between Polen Growth and Congress Mid
Assuming the 90 days horizon Polen Growth Fund is expected to generate 1.03 times more return on investment than Congress Mid. However, Polen Growth is 1.03 times more volatile than Congress Mid Cap. It trades about 0.1 of its potential returns per unit of risk. Congress Mid Cap is currently generating about 0.04 per unit of risk. If you would invest 3,072 in Polen Growth Fund on August 28, 2024 and sell it today you would earn a total of 1,919 from holding Polen Growth Fund or generate 62.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polen Growth Fund vs. Congress Mid Cap
Performance |
| Timeline |
| Polen Growth |
| Congress Mid Cap |
Polen Growth and Congress Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polen Growth and Congress Mid
The main advantage of trading using opposite Polen Growth and Congress Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polen Growth position performs unexpectedly, Congress Mid 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 Congress Mid will offset losses from the drop in Congress Mid's long position.| Polen Growth vs. Congress Mid Cap | Polen Growth vs. Wcm Focused International | Polen Growth vs. Polen Growth Fund | Polen Growth vs. Polen International Growth |
| Congress Mid vs. Polen Growth Fund | Congress Mid vs. Segall Bryant Hamill | Congress Mid vs. Diamond Hill All | Congress Mid vs. Wells Fargo Index |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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