Correlation Between Arctic Gold and Polygiene
Can any of the company-specific risk be diversified away by investing in both Arctic Gold and Polygiene 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 Arctic Gold and Polygiene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arctic Gold Publ and Polygiene AB, you can compare the effects of market volatilities on Arctic Gold and Polygiene 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 Arctic Gold with a short position of Polygiene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Gold and Polygiene.
Diversification Opportunities for Arctic Gold and Polygiene
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arctic and Polygiene is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Gold Publ and Polygiene AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polygiene AB and Arctic Gold 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 Arctic Gold Publ are associated (or correlated) with Polygiene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polygiene AB has no effect on the direction of Arctic Gold i.e., Arctic Gold and Polygiene go up and down completely randomly.
Pair Corralation between Arctic Gold and Polygiene
Assuming the 90 days trading horizon Arctic Gold Publ is expected to under-perform the Polygiene. In addition to that, Arctic Gold is 1.8 times more volatile than Polygiene AB. It trades about -0.02 of its total potential returns per unit of risk. Polygiene AB is currently generating about 0.14 per unit of volatility. If you would invest 1,095 in Polygiene AB on September 13, 2024 and sell it today you would earn a total of 120.00 from holding Polygiene AB or generate 10.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arctic Gold Publ vs. Polygiene AB
Performance |
| Timeline |
| Arctic Gold Publ |
| Polygiene AB |
Arctic Gold and Polygiene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arctic Gold and Polygiene
The main advantage of trading using opposite Arctic Gold and Polygiene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Gold position performs unexpectedly, Polygiene 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 Polygiene will offset losses from the drop in Polygiene's long position.The idea behind Arctic Gold Publ and Polygiene AB 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.| Polygiene vs. G5 Entertainment publ | Polygiene vs. Nexam Chemical Holding | Polygiene vs. Swedencare publ AB | Polygiene vs. Genovis AB |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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