Correlation Between Polen Growth and Df Dent
Can any of the company-specific risk be diversified away by investing in both Polen Growth and Df Dent 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 Df Dent 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 Df Dent Premier, you can compare the effects of market volatilities on Polen Growth and Df Dent 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 Df Dent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polen Growth and Df Dent.
Diversification Opportunities for Polen Growth and Df Dent
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Polen and DFDPX is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Polen Growth Fund and Df Dent Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Df Dent Premier 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 Df Dent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Df Dent Premier has no effect on the direction of Polen Growth i.e., Polen Growth and Df Dent go up and down completely randomly.
Pair Corralation between Polen Growth and Df Dent
Assuming the 90 days horizon Polen Growth Fund is expected to generate 1.0 times more return on investment than Df Dent. However, Polen Growth is 1.0 times more volatile than Df Dent Premier. It trades about 0.25 of its potential returns per unit of risk. Df Dent Premier is currently generating about 0.17 per unit of risk. If you would invest 4,553 in Polen Growth Fund on August 30, 2024 and sell it today you would earn a total of 270.00 from holding Polen Growth Fund or generate 5.93% 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. Df Dent Premier
Performance |
| Timeline |
| Polen Growth |
| Df Dent Premier |
Polen Growth and Df Dent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polen Growth and Df Dent
The main advantage of trading using opposite Polen Growth and Df Dent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polen Growth position performs unexpectedly, Df Dent 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 Df Dent will offset losses from the drop in Df Dent's long position.| Polen Growth vs. Polen Growth Fund | Polen Growth vs. Edgewood Growth Fund | Polen Growth vs. Akre Focus Fund | Polen Growth vs. Brown Advisory Sustainable |
| Df Dent vs. Df Dent Midcap | Df Dent vs. Conestoga Smid Cap | Df Dent vs. Ycg Enhanced Fund | Df Dent vs. Df Dent Small |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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