Correlation Between Polar Capital and Vivendi SA
Can any of the company-specific risk be diversified away by investing in both Polar Capital and Vivendi SA 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 Polar Capital and Vivendi SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polar Capital Technology and Vivendi SA, you can compare the effects of market volatilities on Polar Capital and Vivendi SA 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 Polar Capital with a short position of Vivendi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Vivendi SA.
Diversification Opportunities for Polar Capital and Vivendi SA
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Polar and Vivendi is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and Vivendi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivendi SA and Polar Capital 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 Polar Capital Technology are associated (or correlated) with Vivendi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivendi SA has no effect on the direction of Polar Capital i.e., Polar Capital and Vivendi SA go up and down completely randomly.
Pair Corralation between Polar Capital and Vivendi SA
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 0.75 times more return on investment than Vivendi SA. However, Polar Capital Technology is 1.33 times less risky than Vivendi SA. It trades about 0.35 of its potential returns per unit of risk. Vivendi SA is currently generating about -0.12 per unit of risk. If you would invest 35,100 in Polar Capital Technology on October 25, 2024 and sell it today you would earn a total of 3,000 from holding Polar Capital Technology or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Polar Capital Technology vs. Vivendi SA
Performance |
| Timeline |
| Polar Capital Technology |
| Vivendi SA |
Polar Capital and Vivendi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Vivendi SA
The main advantage of trading using opposite Polar Capital and Vivendi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, Vivendi SA 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 Vivendi SA will offset losses from the drop in Vivendi SA's long position.| Polar Capital vs. Porvair plc | Polar Capital vs. Anglo Asian Mining | Polar Capital vs. AfriTin Mining | Polar Capital vs. Sealed Air Corp |
| Vivendi SA vs. First Class Metals | Vivendi SA vs. Jacquet Metal Service | Vivendi SA vs. Central Asia Metals | Vivendi SA vs. Gaztransport et Technigaz |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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