Correlation Between Polar Capital and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both Polar Capital and Supermarket Income 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 Supermarket Income 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 Supermarket Income REIT, you can compare the effects of market volatilities on Polar Capital and Supermarket Income 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 Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Supermarket Income.
Diversification Opportunities for Polar Capital and Supermarket Income
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Polar and Supermarket is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and Supermarket Income REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supermarket Income REIT 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 Supermarket Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supermarket Income REIT has no effect on the direction of Polar Capital i.e., Polar Capital and Supermarket Income go up and down completely randomly.
Pair Corralation between Polar Capital and Supermarket Income
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 1.65 times more return on investment than Supermarket Income. However, Polar Capital is 1.65 times more volatile than Supermarket Income REIT. It trades about 0.26 of its potential returns per unit of risk. Supermarket Income REIT is currently generating about 0.05 per unit of risk. If you would invest 31,100 in Polar Capital Technology on September 4, 2024 and sell it today you would earn a total of 2,850 from holding Polar Capital Technology or generate 9.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polar Capital Technology vs. Supermarket Income REIT
Performance |
| Timeline |
| Polar Capital Technology |
| Supermarket Income REIT |
Polar Capital and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Supermarket Income
The main advantage of trading using opposite Polar Capital and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, Supermarket Income 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 Supermarket Income will offset losses from the drop in Supermarket Income's long position.| Polar Capital vs. SupplyMe Capital PLC | Polar Capital vs. Lloyds Banking Group | Polar Capital vs. Premier African Minerals | Polar Capital vs. SANTANDER UK 8 |
| Supermarket Income vs. Workspace Group PLC | Supermarket Income vs. Reckitt Benckiser Group | Supermarket Income vs. Polar Capital Technology | Supermarket Income vs. DXC Technology Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |