Correlation Between Chrysalis Investments and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Chrysalis Investments 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 Chrysalis Investments and Polar Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chrysalis Investments and Polar Capital Technology, you can compare the effects of market volatilities on Chrysalis Investments 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 Chrysalis Investments with a short position of Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chrysalis Investments and Polar Capital.
Diversification Opportunities for Chrysalis Investments and Polar Capital
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chrysalis and Polar is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chrysalis Investments 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 Chrysalis Investments 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 Chrysalis Investments 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 Chrysalis Investments i.e., Chrysalis Investments and Polar Capital go up and down completely randomly.
Pair Corralation between Chrysalis Investments and Polar Capital
Assuming the 90 days trading horizon Chrysalis Investments is expected to under-perform the Polar Capital. But the stock apears to be less risky and, when comparing its historical volatility, Chrysalis Investments is 1.01 times less risky than Polar Capital. The stock trades about -0.43 of its potential returns per unit of risk. The Polar Capital Technology is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 34,800 in Polar Capital Technology on October 26, 2024 and sell it today you would earn a total of 3,350 from holding Polar Capital Technology or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chrysalis Investments vs. Polar Capital Technology
Performance |
| Timeline |
| Chrysalis Investments |
| Polar Capital Technology |
Chrysalis Investments and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chrysalis Investments and Polar Capital
The main advantage of trading using opposite Chrysalis Investments and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chrysalis Investments 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.| Chrysalis Investments vs. SupplyMe Capital PLC | Chrysalis Investments vs. Premier African Minerals | Chrysalis Investments vs. SANTANDER UK 8 | Chrysalis Investments vs. Tower Resources plc |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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