Correlation Between Seafarer Overseas and Polen Growth
Can any of the company-specific risk be diversified away by investing in both Seafarer Overseas and Polen Growth 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 Seafarer Overseas and Polen Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seafarer Overseas Growth and Polen Growth Fund, you can compare the effects of market volatilities on Seafarer Overseas and Polen Growth 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 Seafarer Overseas with a short position of Polen Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seafarer Overseas and Polen Growth.
Diversification Opportunities for Seafarer Overseas and Polen Growth
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Seafarer and Polen is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Seafarer Overseas Growth and Polen Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Growth and Seafarer Overseas 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 Seafarer Overseas Growth are associated (or correlated) with Polen Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen Growth has no effect on the direction of Seafarer Overseas i.e., Seafarer Overseas and Polen Growth go up and down completely randomly.
Pair Corralation between Seafarer Overseas and Polen Growth
Assuming the 90 days horizon Seafarer Overseas is expected to generate 6.79 times less return on investment than Polen Growth. But when comparing it to its historical volatility, Seafarer Overseas Growth is 1.39 times less risky than Polen Growth. It trades about 0.02 of its potential returns per unit of risk. Polen Growth Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seafarer Overseas Growth vs. Polen Growth Fund
Performance |
| Timeline |
| Seafarer Overseas Growth |
| Polen Growth |
Seafarer Overseas and Polen Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seafarer Overseas and Polen Growth
The main advantage of trading using opposite Seafarer Overseas and Polen Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seafarer Overseas position performs unexpectedly, Polen Growth 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 Growth will offset losses from the drop in Polen Growth's long position.| Seafarer Overseas vs. Fidelity Advisor Diversified | Seafarer Overseas vs. Lord Abbett Diversified | Seafarer Overseas vs. Pgim Conservative Retirement | Seafarer Overseas vs. Calvert Conservative Allocation |
| Polen Growth vs. Polen Growth Fund | Polen Growth vs. Edgewood Growth Fund | Polen Growth vs. Akre Focus Fund | Polen Growth vs. Brown Advisory Sustainable |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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