Correlation Between Pzena Mid and Pro-blend(r) Moderate

Can any of the company-specific risk be diversified away by investing in both Pzena Mid and Pro-blend(r) Moderate 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 Pzena Mid and Pro-blend(r) Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pzena Mid Cap and Pro Blend Moderate Term, you can compare the effects of market volatilities on Pzena Mid and Pro-blend(r) Moderate 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 Pzena Mid with a short position of Pro-blend(r) Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pzena Mid and Pro-blend(r) Moderate.

Diversification Opportunities for Pzena Mid and Pro-blend(r) Moderate

0.91

Correlation Coefficient

Pzena Mid  Pro-blend(r) Moderate

Almost no diversification

The 3 months correlation between Pzena and Pro-blend(r) is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Pzena Mid Cap and Pro Blend Moderate Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro-blend(r) Moderate and Pzena Mid 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 Pzena Mid Cap are associated (or correlated) with Pro-blend(r) Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro-blend(r) Moderate has no effect on the direction of Pzena Mid i.e., Pzena Mid and Pro-blend(r) Moderate go up and down completely randomly.

Pair Corralation between Pzena Mid and Pro-blend(r) Moderate

Assuming the 90 days horizon Pzena Mid Cap is expected to generate 1.85 times more return on investment than Pro-blend(r) Moderate. However, Pzena Mid is 1.85 times more volatile than Pro Blend Moderate Term. It trades about 0.29 of its potential returns per unit of risk. Pro Blend Moderate Term is currently generating about 0.16 per unit of risk. If you would invest  1,176  in Pzena Mid Cap on October 20, 2024 and sell it today you would earn a total of  55.00  from holding Pzena Mid Cap or generate 4.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Pzena Mid Cap  vs.  Pro Blend Moderate Term

Pzena Mid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pzena Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's primary indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pro-blend(r) Moderate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pro Blend Moderate Term has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pro-blend(r) Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pzena Mid and Pro-blend(r) Moderate

The main advantage of trading using opposite Pzena Mid and Pro-blend(r) Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pzena Mid position performs unexpectedly, Pro-blend(r) Moderate 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 Pro-blend(r) Moderate will offset losses from the drop in Pro-blend(r) Moderate's long position.

The idea behind Pzena Mid Cap and Pro Blend Moderate Term 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.