Correlation Between Polar Capital and One Media
Can any of the company-specific risk be diversified away by investing in both Polar Capital and One Media 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 One Media 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 One Media iP, you can compare the effects of market volatilities on Polar Capital and One Media 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 One Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and One Media.
Diversification Opportunities for Polar Capital and One Media
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Polar and One is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and One Media iP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Media iP 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 One Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Media iP has no effect on the direction of Polar Capital i.e., Polar Capital and One Media go up and down completely randomly.
Pair Corralation between Polar Capital and One Media
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 0.48 times more return on investment than One Media. However, Polar Capital Technology is 2.09 times less risky than One Media. It trades about 0.11 of its potential returns per unit of risk. One Media iP is currently generating about 0.0 per unit of risk. If you would invest 20,100 in Polar Capital Technology on October 28, 2024 and sell it today you would earn a total of 18,150 from holding Polar Capital Technology or generate 90.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polar Capital Technology vs. One Media iP
Performance |
| Timeline |
| Polar Capital Technology |
| One Media iP |
Polar Capital and One Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and One Media
The main advantage of trading using opposite Polar Capital and One Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, One Media 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 One Media will offset losses from the drop in One Media's long position.| Polar Capital vs. Zegona Communications Plc | Polar Capital vs. Catena Media PLC | Polar Capital vs. Flutter Entertainment PLC | Polar Capital vs. Intermediate Capital Group |
| One Media vs. CleanTech Lithium plc | One Media vs. Prosiebensat 1 Media | One Media vs. Ondine Biomedical | One Media vs. International Biotechnology Trust |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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