Correlation Between Polar Capital and Capital Metals
Can any of the company-specific risk be diversified away by investing in both Polar Capital and Capital Metals 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 Capital Metals 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 Capital Metals PLC, you can compare the effects of market volatilities on Polar Capital and Capital Metals 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 Capital Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Capital Metals.
Diversification Opportunities for Polar Capital and Capital Metals
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polar and Capital is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and Capital Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Metals 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 Capital Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Metals PLC has no effect on the direction of Polar Capital i.e., Polar Capital and Capital Metals go up and down completely randomly.
Pair Corralation between Polar Capital and Capital Metals
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 0.35 times more return on investment than Capital Metals. However, Polar Capital Technology is 2.9 times less risky than Capital Metals. It trades about 0.12 of its potential returns per unit of risk. Capital Metals PLC is currently generating about 0.01 per unit of risk. If you would invest 32,950 in Polar Capital Technology on November 7, 2024 and sell it today you would earn a total of 3,750 from holding Polar Capital Technology or generate 11.38% 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. Capital Metals PLC
Performance |
| Timeline |
| Polar Capital Technology |
| Capital Metals PLC |
Polar Capital and Capital Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Capital Metals
The main advantage of trading using opposite Polar Capital and Capital Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, Capital Metals 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 Capital Metals will offset losses from the drop in Capital Metals' long position.| Polar Capital vs. Diversified Energy | Polar Capital vs. Rheinmetall AG | Polar Capital vs. Wheaton Precious Metals | Polar Capital vs. Fulcrum Metals PLC |
| Capital Metals vs. Europa Metals | Capital Metals vs. Games Workshop Group | Capital Metals vs. Take Two Interactive Software | Capital Metals vs. Golden Metal Resources |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |