Correlation Between Panther Metals and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Panther Metals 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 Panther Metals and Polar Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panther Metals PLC and Polar Capital Technology, you can compare the effects of market volatilities on Panther Metals 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 Panther Metals with a short position of Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panther Metals and Polar Capital.
Diversification Opportunities for Panther Metals and Polar Capital
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Panther and Polar is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Panther Metals 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 Panther Metals 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 Panther Metals 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 Panther Metals i.e., Panther Metals and Polar Capital go up and down completely randomly.
Pair Corralation between Panther Metals and Polar Capital
Assuming the 90 days trading horizon Panther Metals is expected to generate 10.76 times less return on investment than Polar Capital. In addition to that, Panther Metals is 2.31 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 0.32 per unit of volatility. If you would invest 34,700 in Polar Capital Technology on October 21, 2024 and sell it today you would earn a total of 2,500 from holding Polar Capital Technology or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panther Metals PLC vs. Polar Capital Technology
Performance |
| Timeline |
| Panther Metals PLC |
| Polar Capital Technology |
Panther Metals and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panther Metals and Polar Capital
The main advantage of trading using opposite Panther Metals and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panther Metals 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.| Panther Metals vs. First Class Metals | Panther Metals vs. Cornish Metals | Panther Metals vs. Ebro Foods | Panther Metals vs. Adriatic Metals |
| Polar Capital vs. Hollywood Bowl Group | Polar Capital vs. Prosiebensat 1 Media | Polar Capital vs. Ubisoft Entertainment | Polar Capital vs. Costco Wholesale Corp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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