Correlation Between Polar Capital and Six Circles
Can any of the company-specific risk be diversified away by investing in both Polar Capital and Six Circles 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 Six Circles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polar Capital Emerging and Six Circles Managed, you can compare the effects of market volatilities on Polar Capital and Six Circles 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 Six Circles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Six Circles.
Diversification Opportunities for Polar Capital and Six Circles
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Polar and Six is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Emerging and Six Circles Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Circles Managed 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 Emerging are associated (or correlated) with Six Circles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Circles Managed has no effect on the direction of Polar Capital i.e., Polar Capital and Six Circles go up and down completely randomly.
Pair Corralation between Polar Capital and Six Circles
Assuming the 90 days horizon Polar Capital is expected to generate 2.18 times less return on investment than Six Circles. In addition to that, Polar Capital is 1.15 times more volatile than Six Circles Managed. It trades about 0.06 of its total potential returns per unit of risk. Six Circles Managed is currently generating about 0.14 per unit of volatility. If you would invest 1,607 in Six Circles Managed on August 26, 2024 and sell it today you would earn a total of 511.00 from holding Six Circles Managed or generate 31.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polar Capital Emerging vs. Six Circles Managed
Performance |
| Timeline |
| Polar Capital Emerging |
| Six Circles Managed |
Polar Capital and Six Circles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Six Circles
The main advantage of trading using opposite Polar Capital and Six Circles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, Six Circles 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 Six Circles will offset losses from the drop in Six Circles' long position.| Polar Capital vs. Polar Capital Emerging | Polar Capital vs. Fidelity Capital Income | Polar Capital vs. Fidelity Nasdaq Posite | Polar Capital vs. Utilities Portfolio Utilities |
| Six Circles vs. Delaware Limited Term Diversified | Six Circles vs. Aqr Diversified Arbitrage | Six Circles vs. Lord Abbett Diversified | Six Circles vs. American Funds Conservative |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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