Correlation Between Polar Capital and BlackRock Frontiers
Can any of the company-specific risk be diversified away by investing in both Polar Capital and BlackRock Frontiers 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 BlackRock Frontiers 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 BlackRock Frontiers Investment, you can compare the effects of market volatilities on Polar Capital and BlackRock Frontiers 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 BlackRock Frontiers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and BlackRock Frontiers.
Diversification Opportunities for Polar Capital and BlackRock Frontiers
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Polar and BlackRock is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and BlackRock Frontiers Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Frontiers 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 BlackRock Frontiers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Frontiers has no effect on the direction of Polar Capital i.e., Polar Capital and BlackRock Frontiers go up and down completely randomly.
Pair Corralation between Polar Capital and BlackRock Frontiers
Assuming the 90 days trading horizon Polar Capital is expected to generate 1.89 times less return on investment than BlackRock Frontiers. In addition to that, Polar Capital is 1.38 times more volatile than BlackRock Frontiers Investment. It trades about 0.11 of its total potential returns per unit of risk. BlackRock Frontiers Investment is currently generating about 0.29 per unit of volatility. If you would invest 14,650 in BlackRock Frontiers Investment on October 11, 2024 and sell it today you would earn a total of 1,450 from holding BlackRock Frontiers Investment or generate 9.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.56% |
| Values | Daily Returns |
Polar Capital Technology vs. BlackRock Frontiers Investment
Performance |
| Timeline |
| Polar Capital Technology |
| BlackRock Frontiers |
Polar Capital and BlackRock Frontiers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and BlackRock Frontiers
The main advantage of trading using opposite Polar Capital and BlackRock Frontiers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, BlackRock Frontiers 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 BlackRock Frontiers will offset losses from the drop in BlackRock Frontiers' long position.| Polar Capital vs. Smithson Investment Trust | Polar Capital vs. Bankers Investment Trust | Polar Capital vs. Zoom Video Communications | Polar Capital vs. New Residential Investment |
| BlackRock Frontiers vs. SupplyMe Capital PLC | BlackRock Frontiers vs. SM Energy Co | BlackRock Frontiers vs. FuelCell Energy | BlackRock Frontiers vs. Grand Vision Media |
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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