Correlation Between Polen Growth and Pear Tree
Can any of the company-specific risk be diversified away by investing in both Polen Growth and Pear Tree 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 Growth and Pear Tree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polen Growth Fund and Pear Tree Quality, you can compare the effects of market volatilities on Polen Growth and Pear Tree 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 Growth with a short position of Pear Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polen Growth and Pear Tree.
Diversification Opportunities for Polen Growth and Pear Tree
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Polen and Pear is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Polen Growth Fund and Pear Tree Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Tree Quality and Polen Growth 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 Growth Fund are associated (or correlated) with Pear Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Tree Quality has no effect on the direction of Polen Growth i.e., Polen Growth and Pear Tree go up and down completely randomly.
Pair Corralation between Polen Growth and Pear Tree
Assuming the 90 days horizon Polen Growth Fund is expected to under-perform the Pear Tree. In addition to that, Polen Growth is 1.33 times more volatile than Pear Tree Quality. It trades about -0.07 of its total potential returns per unit of risk. Pear Tree Quality is currently generating about 0.0 per unit of volatility. If you would invest 2,253 in Pear Tree Quality on December 28, 2024 and sell it today you would lose (2.00) from holding Pear Tree Quality or give up 0.09% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Polen Growth Fund vs. Pear Tree Quality
Performance |
Timeline |
Polen Growth |
Pear Tree Quality |
Polen Growth and Pear Tree Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Polen Growth and Pear Tree
The main advantage of trading using opposite Polen Growth and Pear Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polen Growth position performs unexpectedly, Pear Tree 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 Pear Tree will offset losses from the drop in Pear Tree's long position.Polen Growth vs. Congress Mid Cap | Polen Growth vs. Wcm Focused International | Polen Growth vs. Polen International Growth | Polen Growth vs. Polen Global Growth |
Pear Tree vs. Pear Tree Polaris | Pear Tree vs. Pear Tree Polaris | Pear Tree vs. Pear Tree Polaris | Pear Tree vs. Polen 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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