Correlation Between Catena Media and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Catena Media 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 Catena Media and Polar Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catena Media PLC and Polar Capital Technology, you can compare the effects of market volatilities on Catena Media 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 Catena Media with a short position of Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Polar Capital.
Diversification Opportunities for Catena Media and Polar Capital
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Catena and Polar is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media PLC 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 Catena Media 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 Catena Media PLC 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 Catena Media i.e., Catena Media and Polar Capital go up and down completely randomly.
Pair Corralation between Catena Media and Polar Capital
Assuming the 90 days trading horizon Catena Media PLC is expected to under-perform the Polar Capital. But the stock apears to be less risky and, when comparing its historical volatility, Catena Media PLC is 1.57 times less risky than Polar Capital. The stock trades about -0.06 of its potential returns per unit of risk. The Polar Capital Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 36,300 in Polar Capital Technology on November 6, 2024 and sell it today you would earn a total of 200.00 from holding Polar Capital Technology or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena Media PLC vs. Polar Capital Technology
Performance |
| Timeline |
| Catena Media PLC |
| Polar Capital Technology |
Catena Media and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and Polar Capital
The main advantage of trading using opposite Catena Media and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media 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.| Catena Media vs. JB Hunt Transport | Catena Media vs. Cars Inc | Catena Media vs. Tatton Asset Management | Catena Media vs. Check Point Software |
| Polar Capital vs. Diversified Energy | Polar Capital vs. Rheinmetall AG | Polar Capital vs. Wheaton Precious Metals | Polar Capital vs. Fulcrum Metals 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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