Correlation Between Futura Medical and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Futura Medical 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 Futura Medical and Polar Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Futura Medical and Polar Capital Technology, you can compare the effects of market volatilities on Futura Medical 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 Futura Medical with a short position of Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Futura Medical and Polar Capital.
Diversification Opportunities for Futura Medical and Polar Capital
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Futura and Polar is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Futura Medical 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 Futura Medical 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 Futura Medical 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 Futura Medical i.e., Futura Medical and Polar Capital go up and down completely randomly.
Pair Corralation between Futura Medical and Polar Capital
Assuming the 90 days trading horizon Futura Medical is expected to under-perform the Polar Capital. In addition to that, Futura Medical is 1.45 times more volatile than Polar Capital Technology. It trades about -0.3 of its total potential returns per unit of risk. Polar Capital Technology is currently generating about 0.23 per unit of volatility. If you would invest 31,840 in Polar Capital Technology on August 26, 2024 and sell it today you would earn a total of 2,610 from holding Polar Capital Technology or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Futura Medical vs. Polar Capital Technology
Performance |
| Timeline |
| Futura Medical |
| Polar Capital Technology |
Futura Medical and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Futura Medical and Polar Capital
The main advantage of trading using opposite Futura Medical and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Futura Medical 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.| Futura Medical vs. Samsung Electronics Co | Futura Medical vs. Samsung Electronics Co | Futura Medical vs. Hyundai Motor | Futura Medical vs. Toyota Motor Corp |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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