Correlation Between Polar Capital and Trainline Plc
Can any of the company-specific risk be diversified away by investing in both Polar Capital and Trainline 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 Trainline 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 Trainline Plc, you can compare the effects of market volatilities on Polar Capital and Trainline 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 Trainline Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Trainline Plc.
Diversification Opportunities for Polar Capital and Trainline Plc
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Polar and Trainline is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and Trainline Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trainline 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 Trainline Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trainline Plc has no effect on the direction of Polar Capital i.e., Polar Capital and Trainline Plc go up and down completely randomly.
Pair Corralation between Polar Capital and Trainline Plc
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 0.59 times more return on investment than Trainline Plc. However, Polar Capital Technology is 1.71 times less risky than Trainline Plc. It trades about 0.11 of its potential returns per unit of risk. Trainline Plc is currently generating about -0.1 per unit of risk. If you would invest 33,600 in Polar Capital Technology on October 30, 2024 and sell it today you would earn a total of 2,050 from holding Polar Capital Technology or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polar Capital Technology vs. Trainline Plc
Performance |
| Timeline |
| Polar Capital Technology |
| Trainline Plc |
Polar Capital and Trainline Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Trainline Plc
The main advantage of trading using opposite Polar Capital and Trainline Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, Trainline 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 Trainline Plc will offset losses from the drop in Trainline Plc's long position.| Polar Capital vs. Pressure Technologies Plc | Polar Capital vs. Solstad Offshore ASA | Polar Capital vs. International Consolidated Airlines | Polar Capital vs. Made Tech Group |
| Trainline Plc vs. Jacquet Metal Service | Trainline Plc vs. Melia Hotels | Trainline Plc vs. Erste Group Bank | Trainline Plc vs. Nordea Bank Abp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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