Correlation Between Congress Mid and Polen International

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

By analyzing existing cross correlation between Congress Mid Cap and Polen International Growth, you can compare the effects of market volatilities on Congress Mid and Polen International 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 Congress Mid with a short position of Polen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Congress Mid and Polen International.

Diversification Opportunities for Congress Mid and Polen International

-0.29

Correlation Coefficient

Congress Mid  Polen International

Very good diversification

The 3 months correlation between Congress and Polen is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Congress Mid Cap and Polen International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen International and Congress 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 Congress Mid Cap are associated (or correlated) with Polen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen International has no effect on the direction of Congress Mid i.e., Congress Mid and Polen International go up and down completely randomly.

Pair Corralation between Congress Mid and Polen International

Assuming the 90 days horizon Congress Mid Cap is expected to generate 1.13 times more return on investment than Polen International. However, Congress Mid is 1.13 times more volatile than Polen International Growth. It trades about 0.17 of its potential returns per unit of risk. Polen International Growth is currently generating about 0.03 per unit of risk. If you would invest  2,473  in Congress Mid Cap on September 9, 2024 and sell it today you would earn a total of  257.00  from holding Congress Mid Cap or generate 10.39% return on investment over 90 days.

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

Congress Mid Cap  vs.  Polen International Growth

Congress Mid Cap

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Congress Mid Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Congress Mid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Polen International

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Polen International Growth are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Polen International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Congress Mid and Polen International

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

The idea behind Congress Mid Cap and Polen International Growth 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.