Correlation Between Polar Capital and Lowland Investment
Can any of the company-specific risk be diversified away by investing in both Polar Capital and Lowland Investment 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 Lowland Investment 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 Lowland Investment Co, you can compare the effects of market volatilities on Polar Capital and Lowland Investment 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 Lowland Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Lowland Investment.
Diversification Opportunities for Polar Capital and Lowland Investment
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Polar and Lowland is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and Lowland Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowland Investment 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 Lowland Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowland Investment has no effect on the direction of Polar Capital i.e., Polar Capital and Lowland Investment go up and down completely randomly.
Pair Corralation between Polar Capital and Lowland Investment
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 1.44 times more return on investment than Lowland Investment. However, Polar Capital is 1.44 times more volatile than Lowland Investment Co. It trades about 0.15 of its potential returns per unit of risk. Lowland Investment Co is currently generating about -0.07 per unit of risk. If you would invest 29,350 in Polar Capital Technology on September 2, 2024 and sell it today you would earn a total of 4,250 from holding Polar Capital Technology or generate 14.48% 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. Lowland Investment Co
Performance |
| Timeline |
| Polar Capital Technology |
| Lowland Investment |
Polar Capital and Lowland Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Lowland Investment
The main advantage of trading using opposite Polar Capital and Lowland Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, Lowland Investment 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 Lowland Investment will offset losses from the drop in Lowland Investment's long position.| Polar Capital vs. Toyota Motor Corp | Polar Capital vs. SoftBank Group Corp | Polar Capital vs. OTP Bank Nyrt | Polar Capital vs. Las Vegas Sands |
| Lowland Investment vs. Toyota Motor Corp | Lowland Investment vs. SoftBank Group Corp | Lowland Investment vs. OTP Bank Nyrt | Lowland Investment vs. Las Vegas Sands |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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