Correlation Between Mairs Power and Jensen Portfolio
Can any of the company-specific risk be diversified away by investing in both Mairs Power and Jensen Portfolio 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 Mairs Power and Jensen Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mairs Power Growth and The Jensen Portfolio, you can compare the effects of market volatilities on Mairs Power and Jensen Portfolio 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 Mairs Power with a short position of Jensen Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and Jensen Portfolio.
Diversification Opportunities for Mairs Power and Jensen Portfolio
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mairs and Jensen is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Growth and The Jensen Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Portfolio and Mairs Power 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 Mairs Power Growth are associated (or correlated) with Jensen Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Portfolio has no effect on the direction of Mairs Power i.e., Mairs Power and Jensen Portfolio go up and down completely randomly.
Pair Corralation between Mairs Power and Jensen Portfolio
Assuming the 90 days horizon Mairs Power is expected to generate 1.01 times less return on investment than Jensen Portfolio. In addition to that, Mairs Power is 1.0 times more volatile than The Jensen Portfolio. It trades about 0.13 of its total potential returns per unit of risk. The Jensen Portfolio is currently generating about 0.13 per unit of volatility. If you would invest 5,917 in The Jensen Portfolio on September 17, 2024 and sell it today you would earn a total of 68.00 from holding The Jensen Portfolio or generate 1.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mairs Power Growth vs. The Jensen Portfolio
Performance |
Timeline |
Mairs Power Growth |
Jensen Portfolio |
Mairs Power and Jensen Portfolio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mairs Power and Jensen Portfolio
The main advantage of trading using opposite Mairs Power and Jensen Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power position performs unexpectedly, Jensen Portfolio 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 Jensen Portfolio will offset losses from the drop in Jensen Portfolio's long position.Mairs Power vs. Meridian Trarian Fund | Mairs Power vs. Mairs Power Balanced | Mairs Power vs. Clipper Fund Inc | Mairs Power vs. Meridian Growth Fund |
Jensen Portfolio vs. The Jensen Portfolio | Jensen Portfolio vs. Champlain Mid Cap | Jensen Portfolio vs. Massachusetts Investors 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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