Correlation Between Technicolor and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Technicolor 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 Technicolor and Polar Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Technicolor and Polar Capital Technology, you can compare the effects of market volatilities on Technicolor 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 Technicolor with a short position of Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technicolor and Polar Capital.
Diversification Opportunities for Technicolor and Polar Capital
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Technicolor and Polar is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Technicolor 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 Technicolor 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 Technicolor 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 Technicolor i.e., Technicolor and Polar Capital go up and down completely randomly.
Pair Corralation between Technicolor and Polar Capital
Assuming the 90 days trading horizon Technicolor is expected to under-perform the Polar Capital. In addition to that, Technicolor is 3.56 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 0.11 per unit of volatility. If you would invest 18,980 in Polar Capital Technology on October 23, 2024 and sell it today you would earn a total of 18,020 from holding Polar Capital Technology or generate 94.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.59% |
| Values | Daily Returns |
Technicolor vs. Polar Capital Technology
Performance |
| Timeline |
| Technicolor |
| Polar Capital Technology |
Technicolor and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technicolor and Polar Capital
The main advantage of trading using opposite Technicolor and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technicolor 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.| Technicolor vs. Home Depot | Technicolor vs. Weiss Korea Opportunity | Technicolor vs. River and Mercantile | Technicolor vs. Chrysalis Investments |
| Polar Capital vs. Blackrock World Mining | Polar Capital vs. AfriTin Mining | Polar Capital vs. Silver Bullet Data | Polar Capital vs. Thor Mining PLC |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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