Correlation Between Polar Capital and African Pioneer
Can any of the company-specific risk be diversified away by investing in both Polar Capital and African Pioneer 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 African Pioneer 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 African Pioneer PLC, you can compare the effects of market volatilities on Polar Capital and African Pioneer 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 African Pioneer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and African Pioneer.
Diversification Opportunities for Polar Capital and African Pioneer
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Polar and African is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and African Pioneer PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on African Pioneer PLC 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 African Pioneer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of African Pioneer PLC has no effect on the direction of Polar Capital i.e., Polar Capital and African Pioneer go up and down completely randomly.
Pair Corralation between Polar Capital and African Pioneer
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 0.37 times more return on investment than African Pioneer. However, Polar Capital Technology is 2.68 times less risky than African Pioneer. It trades about 0.09 of its potential returns per unit of risk. African Pioneer PLC is currently generating about -0.03 per unit of risk. If you would invest 22,500 in Polar Capital Technology on September 2, 2024 and sell it today you would earn a total of 11,100 from holding Polar Capital Technology or generate 49.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polar Capital Technology vs. African Pioneer PLC
Performance |
| Timeline |
| Polar Capital Technology |
| African Pioneer PLC |
Polar Capital and African Pioneer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and African Pioneer
The main advantage of trading using opposite Polar Capital and African Pioneer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, African Pioneer 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 African Pioneer will offset losses from the drop in African Pioneer's long position.| Polar Capital vs. Toyota Motor Corp | Polar Capital vs. SoftBank Group Corp | Polar Capital vs. OTP Bank Nyrt | Polar Capital vs. Las Vegas Sands |
| African Pioneer vs. Microchip Technology | African Pioneer vs. New Residential Investment | African Pioneer vs. Accsys Technologies PLC | African Pioneer vs. Monster Beverage 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |