Correlation Between Polar Capital and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both Polar Capital and Lendinvest PLC 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 Lendinvest PLC 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 Lendinvest PLC, you can compare the effects of market volatilities on Polar Capital and Lendinvest PLC 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 Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Lendinvest PLC.
Diversification Opportunities for Polar Capital and Lendinvest PLC
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Polar and Lendinvest is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest 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 Lendinvest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendinvest PLC has no effect on the direction of Polar Capital i.e., Polar Capital and Lendinvest PLC go up and down completely randomly.
Pair Corralation between Polar Capital and Lendinvest PLC
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 0.85 times more return on investment than Lendinvest PLC. However, Polar Capital Technology is 1.18 times less risky than Lendinvest PLC. It trades about 0.1 of its potential returns per unit of risk. Lendinvest PLC is currently generating about -0.03 per unit of risk. If you would invest 24,450 in Polar Capital Technology on September 14, 2024 and sell it today you would earn a total of 9,900 from holding Polar Capital Technology or generate 40.49% 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. Lendinvest PLC
Performance |
| Timeline |
| Polar Capital Technology |
| Lendinvest PLC |
Polar Capital and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Lendinvest PLC
The main advantage of trading using opposite Polar Capital and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, Lendinvest PLC 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 Lendinvest PLC will offset losses from the drop in Lendinvest PLC'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 |
| Lendinvest PLC vs. Check Point Software | Lendinvest PLC vs. Creo Medical Group | Lendinvest PLC vs. Polar Capital Technology | Lendinvest PLC vs. SMA Solar 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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