Correlation Between Polen Growth and Wasatch Emerging
Can any of the company-specific risk be diversified away by investing in both Polen Growth and Wasatch Emerging 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 Wasatch Emerging 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 Wasatch Emerging Markets, you can compare the effects of market volatilities on Polen Growth and Wasatch Emerging 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 Wasatch Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polen Growth and Wasatch Emerging.
Diversification Opportunities for Polen Growth and Wasatch Emerging
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polen and Wasatch is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Polen Growth Fund and Wasatch Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Emerging Markets 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 Wasatch Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Emerging Markets has no effect on the direction of Polen Growth i.e., Polen Growth and Wasatch Emerging go up and down completely randomly.
Pair Corralation between Polen Growth and Wasatch Emerging
Assuming the 90 days horizon Polen Growth Fund is expected to generate 1.08 times more return on investment than Wasatch Emerging. However, Polen Growth is 1.08 times more volatile than Wasatch Emerging Markets. It trades about 0.09 of its potential returns per unit of risk. Wasatch Emerging Markets is currently generating about 0.04 per unit of risk. If you would invest 3,585 in Polen Growth Fund on September 1, 2024 and sell it today you would earn a total of 1,258 from holding Polen Growth Fund or generate 35.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Polen Growth Fund vs. Wasatch Emerging Markets
Performance |
| Timeline |
| Polen Growth |
| Wasatch Emerging Markets |
Polen Growth and Wasatch Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polen Growth and Wasatch Emerging
The main advantage of trading using opposite Polen Growth and Wasatch Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polen Growth position performs unexpectedly, Wasatch Emerging 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 Wasatch Emerging will offset losses from the drop in Wasatch Emerging'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 |
| Wasatch Emerging vs. Wasatch Emerging India | Wasatch Emerging vs. Wasatch Emerging Markets | Wasatch Emerging vs. Wasatch Frontier Emerging | Wasatch Emerging vs. Wasatch Global Opportunities |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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