Correlation Between Thompson Largecap and Mairs Power
Can any of the company-specific risk be diversified away by investing in both Thompson Largecap and Mairs Power 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 Thompson Largecap and Mairs Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thompson Largecap Fund and Mairs Power Growth, you can compare the effects of market volatilities on Thompson Largecap and Mairs Power 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 Thompson Largecap with a short position of Mairs Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thompson Largecap and Mairs Power.
Diversification Opportunities for Thompson Largecap and Mairs Power
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Thompson and Mairs is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Thompson Largecap Fund and Mairs Power Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mairs Power Growth and Thompson Largecap 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 Thompson Largecap Fund are associated (or correlated) with Mairs Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mairs Power Growth has no effect on the direction of Thompson Largecap i.e., Thompson Largecap and Mairs Power go up and down completely randomly.
Pair Corralation between Thompson Largecap and Mairs Power
Assuming the 90 days horizon Thompson Largecap is expected to generate 1.4 times less return on investment than Mairs Power. In addition to that, Thompson Largecap is 1.15 times more volatile than Mairs Power Growth. It trades about 0.06 of its total potential returns per unit of risk. Mairs Power Growth is currently generating about 0.1 per unit of volatility. If you would invest 11,960 in Mairs Power Growth on August 26, 2024 and sell it today you would earn a total of 6,058 from holding Mairs Power Growth or generate 50.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thompson Largecap Fund vs. Mairs Power Growth
Performance |
| Timeline |
| Thompson Largecap |
| Mairs Power Growth |
Thompson Largecap and Mairs Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thompson Largecap and Mairs Power
The main advantage of trading using opposite Thompson Largecap and Mairs Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thompson Largecap position performs unexpectedly, Mairs Power 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 Mairs Power will offset losses from the drop in Mairs Power's long position.| Thompson Largecap vs. Clipper Fund Inc | Thompson Largecap vs. Meridian Trarian Fund | Thompson Largecap vs. Meridian Growth Fund | Thompson Largecap vs. Muhlenkamp Fund Institutional |
| Mairs Power vs. Meridian Trarian Fund | Mairs Power vs. Mairs Power Balanced | Mairs Power vs. Clipper Fund Inc | Mairs Power vs. Meridian Growth Fund |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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