Correlation Between Polen Us and Polen Us

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

By analyzing existing cross correlation between Polen Small and Polen Smid, you can compare the effects of market volatilities on Polen Us and Polen 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 Polen Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polen Us and Polen Us.

Diversification Opportunities for Polen Us and Polen Us

0.94

Correlation Coefficient

Polen Us  Polen Us

Almost no diversification

The 3 months correlation between Polen and Polen is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Polen Small and Polen Smid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Smid 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 are associated (or correlated) with Polen Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen Smid has no effect on the direction of Polen Us i.e., Polen Us and Polen Us go up and down completely randomly.

Pair Corralation between Polen Us and Polen Us

Assuming the 90 days horizon Polen Small is expected to generate 1.06 times more return on investment than Polen Us. However, Polen Us is 1.06 times more volatile than Polen Smid. It trades about -0.09 of its potential returns per unit of risk. Polen Smid is currently generating about -0.13 per unit of risk. If you would invest  1,472  in Polen Small on December 28, 2024 and sell it today you would lose (112.00) from holding Polen Small or give up 7.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.36%
Values	Daily Returns

Polen Small  vs.  Polen Smid

Polen Small

Risk-Adjusted Performance

Very Weak

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

Polen Smid

Risk-Adjusted Performance

Very Weak

Over the last 90 days Polen Smid 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.

Pair Trading with Polen Us and Polen Us

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

The idea behind Polen Small and Polen Smid 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.