Correlation Between Polar Capital and EVS Broadcast
Can any of the company-specific risk be diversified away by investing in both Polar Capital and EVS Broadcast 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 EVS Broadcast 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 EVS Broadcast Equipment, you can compare the effects of market volatilities on Polar Capital and EVS Broadcast 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 EVS Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and EVS Broadcast.
Diversification Opportunities for Polar Capital and EVS Broadcast
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Polar and EVS is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and EVS Broadcast Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVS Broadcast Equipment 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 EVS Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVS Broadcast Equipment has no effect on the direction of Polar Capital i.e., Polar Capital and EVS Broadcast go up and down completely randomly.
Pair Corralation between Polar Capital and EVS Broadcast
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 1.3 times more return on investment than EVS Broadcast. However, Polar Capital is 1.3 times more volatile than EVS Broadcast Equipment. It trades about 0.1 of its potential returns per unit of risk. EVS Broadcast Equipment is currently generating about 0.05 per unit of risk. If you would invest 34,350 in Polar Capital Technology on October 13, 2024 and sell it today you would earn a total of 650.00 from holding Polar Capital Technology or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polar Capital Technology vs. EVS Broadcast Equipment
Performance |
| Timeline |
| Polar Capital Technology |
| EVS Broadcast Equipment |
Polar Capital and EVS Broadcast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and EVS Broadcast
The main advantage of trading using opposite Polar Capital and EVS Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, EVS Broadcast 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 EVS Broadcast will offset losses from the drop in EVS Broadcast's long position.| Polar Capital vs. Public Storage | Polar Capital vs. Live Nation Entertainment | Polar Capital vs. Datagroup SE | Polar Capital vs. MediaZest plc |
| EVS Broadcast vs. Allianz Technology Trust | EVS Broadcast vs. Coeur Mining | EVS Broadcast vs. Monster Beverage Corp | EVS Broadcast vs. Polar Capital Technology |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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