Correlation Between Polar Capital and Xeros Technology
Can any of the company-specific risk be diversified away by investing in both Polar Capital and Xeros Technology 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 Xeros Technology 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 Xeros Technology Group, you can compare the effects of market volatilities on Polar Capital and Xeros Technology 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 Xeros Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Xeros Technology.
Diversification Opportunities for Polar Capital and Xeros Technology
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polar and Xeros is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and Xeros Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xeros Technology 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 Xeros Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xeros Technology has no effect on the direction of Polar Capital i.e., Polar Capital and Xeros Technology go up and down completely randomly.
Pair Corralation between Polar Capital and Xeros Technology
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 0.29 times more return on investment than Xeros Technology. However, Polar Capital Technology is 3.5 times less risky than Xeros Technology. It trades about 0.14 of its potential returns per unit of risk. Xeros Technology Group is currently generating about -0.11 per unit of risk. If you would invest 30,350 in Polar Capital Technology on October 26, 2024 and sell it today you would earn a total of 7,800 from holding Polar Capital Technology or generate 25.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polar Capital Technology vs. Xeros Technology Group
Performance |
| Timeline |
| Polar Capital Technology |
| Xeros Technology |
Polar Capital and Xeros Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Xeros Technology
The main advantage of trading using opposite Polar Capital and Xeros Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, Xeros Technology 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 Xeros Technology will offset losses from the drop in Xeros Technology's long position.| Polar Capital vs. Wheaton Precious Metals | Polar Capital vs. Adriatic Metals | Polar Capital vs. Ecclesiastical Insurance Office | Polar Capital vs. Cornish Metals |
| Xeros Technology vs. SupplyMe Capital PLC | Xeros Technology vs. Grand Vision Media | Xeros Technology vs. Overstock | Xeros Technology vs. DG Innovate PLC |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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