Correlation Between Dreyfusstandish Global and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Dreyfusstandish Global 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 Dreyfusstandish Global and Polar Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfusstandish Global Fixed and Polar Capital Emerging, you can compare the effects of market volatilities on Dreyfusstandish Global 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 Dreyfusstandish Global with a short position of Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfusstandish Global and Polar Capital.
Diversification Opportunities for Dreyfusstandish Global and Polar Capital
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dreyfusstandish and Polar is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfusstandish Global Fixed and Polar Capital Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Emerging and Dreyfusstandish Global 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 Dreyfusstandish Global Fixed 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 Emerging has no effect on the direction of Dreyfusstandish Global i.e., Dreyfusstandish Global and Polar Capital go up and down completely randomly.
Pair Corralation between Dreyfusstandish Global and Polar Capital
Assuming the 90 days horizon Dreyfusstandish Global is expected to generate 1.11 times less return on investment than Polar Capital. But when comparing it to its historical volatility, Dreyfusstandish Global Fixed is 3.79 times less risky than Polar Capital. It trades about 0.09 of its potential returns per unit of risk. Polar Capital Emerging is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 744.00 in Polar Capital Emerging on September 4, 2024 and sell it today you would earn a total of 80.00 from holding Polar Capital Emerging or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Dreyfusstandish Global Fixed vs. Polar Capital Emerging
Performance |
| Timeline |
| Dreyfusstandish Global |
| Polar Capital Emerging |
Dreyfusstandish Global and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfusstandish Global and Polar Capital
The main advantage of trading using opposite Dreyfusstandish Global and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfusstandish Global 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.The idea behind Dreyfusstandish Global Fixed and Polar Capital Emerging 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.
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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