Correlation Between Polar Capital and Liontrust Asset
Can any of the company-specific risk be diversified away by investing in both Polar Capital and Liontrust Asset 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 Liontrust Asset 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 Liontrust Asset Management, you can compare the effects of market volatilities on Polar Capital and Liontrust Asset 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 Liontrust Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Liontrust Asset.
Diversification Opportunities for Polar Capital and Liontrust Asset
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Polar and Liontrust is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and Liontrust Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liontrust Asset Mana 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 Liontrust Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liontrust Asset Mana has no effect on the direction of Polar Capital i.e., Polar Capital and Liontrust Asset go up and down completely randomly.
Pair Corralation between Polar Capital and Liontrust Asset
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 0.5 times more return on investment than Liontrust Asset. However, Polar Capital Technology is 2.0 times less risky than Liontrust Asset. It trades about 0.15 of its potential returns per unit of risk. Liontrust Asset Management is currently generating about 0.02 per unit of risk. If you would invest 31,450 in Polar Capital Technology on August 30, 2024 and sell it today you would earn a total of 1,750 from holding Polar Capital Technology or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Polar Capital Technology vs. Liontrust Asset Management
Performance |
| Timeline |
| Polar Capital Technology |
| Liontrust Asset Mana |
Polar Capital and Liontrust Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Liontrust Asset
The main advantage of trading using opposite Polar Capital and Liontrust Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, Liontrust Asset 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 Liontrust Asset will offset losses from the drop in Liontrust Asset's long position.| Polar Capital vs. Samsung Electronics Co | Polar Capital vs. Samsung Electronics Co | Polar Capital vs. Hyundai Motor | Polar Capital vs. Toyota Motor Corp |
| Liontrust Asset vs. Samsung Electronics Co | Liontrust Asset vs. Samsung Electronics Co | Liontrust Asset vs. Hyundai Motor | Liontrust Asset vs. Toyota Motor 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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