Correlation Between Wells Fargo and Polen Growth
Can any of the company-specific risk be diversified away by investing in both Wells Fargo 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 Wells Fargo and Polen Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wells Fargo Index and Polen Growth Fund, you can compare the effects of market volatilities on Wells Fargo 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 Wells Fargo with a short position of Polen Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wells Fargo and Polen Growth.
Diversification Opportunities for Wells Fargo and Polen Growth
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wells and Polen is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Wells Fargo Index and Polen Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Growth and Wells Fargo 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 Wells Fargo Index 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 Wells Fargo i.e., Wells Fargo and Polen Growth go up and down completely randomly.
Pair Corralation between Wells Fargo and Polen Growth
Assuming the 90 days horizon Wells Fargo is expected to generate 2.09 times less return on investment than Polen Growth. But when comparing it to its historical volatility, Wells Fargo Index is 1.7 times less risky than Polen Growth. It trades about 0.08 of its potential returns per unit of risk. Polen Growth Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. 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 |
Wells Fargo Index vs. Polen Growth Fund
Performance |
| Timeline |
| Wells Fargo Index |
| Polen Growth |
Wells Fargo and Polen Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wells Fargo and Polen Growth
The main advantage of trading using opposite Wells Fargo and Polen Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wells Fargo 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.| Wells Fargo vs. Wells Fargo Advantage | Wells Fargo vs. Wells Fargo Advantage | Wells Fargo vs. Wells Fargo Advantage | Wells Fargo vs. Wells Fargo Ultra |
| Polen Growth vs. Congress Mid Cap | Polen Growth vs. Wcm Focused International | Polen Growth vs. Polen Growth Fund | Polen Growth vs. Polen International Growth |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |