Correlation Between Clean Power and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Clean Power 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 Clean Power and Polar Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Power Hydrogen and Polar Capital Technology, you can compare the effects of market volatilities on Clean Power 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 Clean Power with a short position of Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Power and Polar Capital.
Diversification Opportunities for Clean Power and Polar Capital
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clean and Polar is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Clean Power Hydrogen 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 Clean Power 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 Clean Power Hydrogen 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 Clean Power i.e., Clean Power and Polar Capital go up and down completely randomly.
Pair Corralation between Clean Power and Polar Capital
Assuming the 90 days trading horizon Clean Power Hydrogen is expected to generate 0.76 times more return on investment than Polar Capital. However, Clean Power Hydrogen is 1.32 times less risky than Polar Capital. It trades about 0.19 of its potential returns per unit of risk. Polar Capital Technology is currently generating about 0.02 per unit of risk. If you would invest 730.00 in Clean Power Hydrogen on November 6, 2024 and sell it today you would earn a total of 45.00 from holding Clean Power Hydrogen or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Power Hydrogen vs. Polar Capital Technology
Performance |
| Timeline |
| Clean Power Hydrogen |
| Polar Capital Technology |
Clean Power and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Power and Polar Capital
The main advantage of trading using opposite Clean Power and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Power 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.| Clean Power vs. Samsung Electronics Co | Clean Power vs. Samsung Electronics Co | Clean Power vs. Toyota Motor Corp | Clean Power vs. State Bank of |
| Polar Capital vs. Extra Space Storage | Polar Capital vs. Gaztransport et Technigaz | Polar Capital vs. Datagroup SE | Polar Capital vs. Ross Stores |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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