Correlation Between Polar Capital and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Polar Capital and McEwen Mining 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 McEwen Mining 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 McEwen Mining, you can compare the effects of market volatilities on Polar Capital and McEwen Mining 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 McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and McEwen Mining.
Diversification Opportunities for Polar Capital and McEwen Mining
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Polar and McEwen is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining 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 McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Polar Capital i.e., Polar Capital and McEwen Mining go up and down completely randomly.
Pair Corralation between Polar Capital and McEwen Mining
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 0.61 times more return on investment than McEwen Mining. However, Polar Capital Technology is 1.64 times less risky than McEwen Mining. It trades about 0.27 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.34 per unit of risk. If you would invest 31,550 in Polar Capital Technology on August 27, 2024 and sell it today you would earn a total of 2,900 from holding Polar Capital Technology or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polar Capital Technology vs. McEwen Mining
Performance |
| Timeline |
| Polar Capital Technology |
| McEwen Mining |
Polar Capital and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and McEwen Mining
The main advantage of trading using opposite Polar Capital and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, McEwen Mining 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 McEwen Mining will offset losses from the drop in McEwen Mining's long position.| Polar Capital vs. JLEN Environmental Assets | Polar Capital vs. Direct Line Insurance | Polar Capital vs. Medical Properties Trust | Polar Capital vs. Scandic Hotels Group |
| McEwen Mining vs. Naturhouse Health SA | McEwen Mining vs. Neometals | McEwen Mining vs. Universal Music Group | McEwen Mining vs. Cardinal Health |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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