Correlation Between Polen Us and Seix Us

Can any of the company-specific risk be diversified away by investing in both Polen Us and Seix Us 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 Us and Seix Us into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Polen Small Pany and Seix Govt Sec, you can compare the effects of market volatilities on Polen Us and Seix Us 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 Us with a short position of Seix Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polen Us and Seix Us.

Diversification Opportunities for Polen Us and Seix Us

-0.69

Correlation Coefficient

Polen Us  Seix Us

Excellent diversification

The 3 months correlation between Polen and Seix is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Polen Small Pany and Seix Govt Sec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seix Govt Sec and Polen Us 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 Small Pany are associated (or correlated) with Seix Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seix Govt Sec has no effect on the direction of Polen Us i.e., Polen Us and Seix Us go up and down completely randomly.

Pair Corralation between Polen Us and Seix Us

Assuming the 90 days horizon Polen Small Pany is expected to under-perform the Seix Us. In addition to that, Polen Us is 11.57 times more volatile than Seix Govt Sec. It trades about -0.12 of its total potential returns per unit of risk. Seix Govt Sec is currently generating about 0.23 per unit of volatility. If you would invest  977.00  in Seix Govt Sec on December 19, 2024 and sell it today you would earn a total of  15.00  from holding Seix Govt Sec or generate 1.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Polen Small Pany  vs.  Seix Govt Sec

Polen Small Pany

Risk-Adjusted Performance

Very Weak

Over the last 90 days Polen Small Pany has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Seix Govt Sec

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Seix Govt Sec are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Seix Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Polen Us and Seix Us

The main advantage of trading using opposite Polen Us and Seix Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polen Us position performs unexpectedly, Seix Us 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 Seix Us will offset losses from the drop in Seix Us' long position.

The idea behind Polen Small Pany and Seix Govt Sec pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.