Correlation Between Polar Capital and Bank of Ireland
Can any of the company-specific risk be diversified away by investing in both Polar Capital and Bank of Ireland 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 Bank of Ireland 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 Bank of Ireland, you can compare the effects of market volatilities on Polar Capital and Bank of Ireland 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 Bank of Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Bank of Ireland.
Diversification Opportunities for Polar Capital and Bank of Ireland
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Polar and Bank is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and Bank of Ireland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Ireland 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 Bank of Ireland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Ireland has no effect on the direction of Polar Capital i.e., Polar Capital and Bank of Ireland go up and down completely randomly.
Pair Corralation between Polar Capital and Bank of Ireland
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 0.75 times more return on investment than Bank of Ireland. However, Polar Capital Technology is 1.33 times less risky than Bank of Ireland. It trades about 0.07 of its potential returns per unit of risk. Bank of Ireland is currently generating about 0.04 per unit of risk. If you would invest 33,700 in Polar Capital Technology on September 13, 2024 and sell it today you would earn a total of 650.00 from holding Polar Capital Technology or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polar Capital Technology vs. Bank of Ireland
Performance |
| Timeline |
| Polar Capital Technology |
| Bank of Ireland |
Polar Capital and Bank of Ireland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Bank of Ireland
The main advantage of trading using opposite Polar Capital and Bank of Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, Bank of Ireland 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 Bank of Ireland will offset losses from the drop in Bank of Ireland's long position.| Polar Capital vs. Ally Financial | Polar Capital vs. MoneysupermarketCom Group PLC | Polar Capital vs. Cembra Money Bank | Polar Capital vs. Sabre Insurance Group |
| Bank of Ireland vs. Sunny Optical Technology | Bank of Ireland vs. Air Products Chemicals | Bank of Ireland vs. Wizz Air Holdings | Bank of Ireland vs. Celebrus Technologies plc |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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