Correlation Between BH Macro and Polar Capital
Can any of the company-specific risk be diversified away by investing in both BH Macro 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 BH Macro and Polar Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BH Macro Limited and Polar Capital Technology, you can compare the effects of market volatilities on BH Macro 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 BH Macro with a short position of Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of BH Macro and Polar Capital.
Diversification Opportunities for BH Macro and Polar Capital
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between BHMU and Polar is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding BH Macro Limited 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 BH Macro 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 BH Macro Limited 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 BH Macro i.e., BH Macro and Polar Capital go up and down completely randomly.
Pair Corralation between BH Macro and Polar Capital
Assuming the 90 days trading horizon BH Macro is expected to generate 3.73 times less return on investment than Polar Capital. But when comparing it to its historical volatility, BH Macro Limited is 1.06 times less risky than Polar Capital. It trades about 0.03 of its potential returns per unit of risk. Polar Capital Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 22,600 in Polar Capital Technology on August 26, 2024 and sell it today you would earn a total of 11,850 from holding Polar Capital Technology or generate 52.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BH Macro Limited vs. Polar Capital Technology
Performance |
| Timeline |
| BH Macro Limited |
| Polar Capital Technology |
BH Macro and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BH Macro and Polar Capital
The main advantage of trading using opposite BH Macro and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BH Macro 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.| BH Macro vs. Westlake Chemical Corp | BH Macro vs. Thor Mining PLC | BH Macro vs. McEwen Mining | BH Macro vs. Gaztransport et Technigaz |
| Polar Capital vs. Catalyst Media Group | Polar Capital vs. Oncimmune Holdings plc | Polar Capital vs. Invesco Health Care | Polar Capital vs. Coor Service Management |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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