Correlation Between Polar Capital and Technicolor
Can any of the company-specific risk be diversified away by investing in both Polar Capital and Technicolor 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 Technicolor 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 Technicolor, you can compare the effects of market volatilities on Polar Capital and Technicolor 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 Technicolor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Technicolor.
Diversification Opportunities for Polar Capital and Technicolor
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polar and Technicolor is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and Technicolor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technicolor 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 Technicolor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technicolor has no effect on the direction of Polar Capital i.e., Polar Capital and Technicolor go up and down completely randomly.
Pair Corralation between Polar Capital and Technicolor
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 0.32 times more return on investment than Technicolor. However, Polar Capital Technology is 3.09 times less risky than Technicolor. It trades about 0.4 of its potential returns per unit of risk. Technicolor is currently generating about 0.01 per unit of risk. If you would invest 34,050 in Polar Capital Technology on October 9, 2024 and sell it today you would earn a total of 2,250 from holding Polar Capital Technology or generate 6.61% 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. Technicolor
Performance |
| Timeline |
| Polar Capital Technology |
| Technicolor |
Polar Capital and Technicolor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Technicolor
The main advantage of trading using opposite Polar Capital and Technicolor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, Technicolor 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 Technicolor will offset losses from the drop in Technicolor's long position.| Polar Capital vs. Thor Mining PLC | Polar Capital vs. Virgin Wines UK | Polar Capital vs. DXC Technology Co | Polar Capital vs. Software Circle plc |
| Technicolor vs. Walmart | Technicolor vs. BYD Co | Technicolor vs. Volkswagen AG | Technicolor vs. Volkswagen AG Non Vtg |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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