Correlation Between Arrow Electronics and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Arrow Electronics and Polar Capital 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 Arrow Electronics and Polar Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Electronics and Polar Capital Technology, you can compare the effects of market volatilities on Arrow Electronics and Polar Capital 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 Arrow Electronics with a short position of Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Electronics and Polar Capital.
Diversification Opportunities for Arrow Electronics and Polar Capital
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arrow and Polar is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Electronics and Polar Capital Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Technology and Arrow Electronics 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 Arrow Electronics are associated (or correlated) with Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Technology has no effect on the direction of Arrow Electronics i.e., Arrow Electronics and Polar Capital go up and down completely randomly.
Pair Corralation between Arrow Electronics and Polar Capital
Assuming the 90 days trading horizon Arrow Electronics is expected to under-perform the Polar Capital. In addition to that, Arrow Electronics is 1.3 times more volatile than Polar Capital Technology. It trades about -0.01 of its total potential returns per unit of risk. Polar Capital Technology is currently generating about 0.14 per unit of volatility. If you would invest 30,350 in Polar Capital Technology on October 26, 2024 and sell it today you would earn a total of 7,800 from holding Polar Capital Technology or generate 25.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.43% |
| Values | Daily Returns |
Arrow Electronics vs. Polar Capital Technology
Performance |
| Timeline |
| Arrow Electronics |
| Polar Capital Technology |
Arrow Electronics and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Electronics and Polar Capital
The main advantage of trading using opposite Arrow Electronics and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Electronics position performs unexpectedly, Polar Capital 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 Polar Capital will offset losses from the drop in Polar Capital's long position.| Arrow Electronics vs. Pfeiffer Vacuum Technology | Arrow Electronics vs. MTI Wireless Edge | Arrow Electronics vs. Aptitude Software Group | Arrow Electronics vs. Allianz Technology Trust |
| Polar Capital vs. Wheaton Precious Metals | Polar Capital vs. Adriatic Metals | Polar Capital vs. Ecclesiastical Insurance Office | Polar Capital vs. Cornish Metals |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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