Correlation Between Oncimmune Holdings and Polar Capital

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Can any of the company-specific risk be diversified away by investing in both Oncimmune Holdings 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 Oncimmune Holdings and Polar Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oncimmune Holdings plc and Polar Capital Technology, you can compare the effects of market volatilities on Oncimmune Holdings 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 Oncimmune Holdings with a short position of Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oncimmune Holdings and Polar Capital.

Diversification Opportunities for Oncimmune Holdings and Polar Capital

-0.74
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Oncimmune and Polar is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Oncimmune Holdings plc 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 Oncimmune Holdings 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 Oncimmune Holdings plc 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 Oncimmune Holdings i.e., Oncimmune Holdings and Polar Capital go up and down completely randomly.

Pair Corralation between Oncimmune Holdings and Polar Capital

Assuming the 90 days trading horizon Oncimmune Holdings plc is expected to under-perform the Polar Capital. In addition to that, Oncimmune Holdings is 3.86 times more volatile than Polar Capital Technology. It trades about -0.01 of its total potential returns per unit of risk. Polar Capital Technology is currently generating about 0.09 per unit of volatility. If you would invest  19,220  in Polar Capital Technology on August 26, 2024 and sell it today you would earn a total of  15,230  from holding Polar Capital Technology or generate 79.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Oncimmune Holdings plc  vs.  Polar Capital Technology

 Performance 
       Timeline  
Oncimmune Holdings plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Oncimmune Holdings plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Oncimmune Holdings is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
Polar Capital Technology 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Polar Capital Technology are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Polar Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Oncimmune Holdings and Polar Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oncimmune Holdings and Polar Capital

The main advantage of trading using opposite Oncimmune Holdings and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oncimmune Holdings 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 Oncimmune Holdings plc and Polar Capital Technology 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.
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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