Correlation Between Polar Capital and Mid Cap
Can any of the company-specific risk be diversified away by investing in both Polar Capital and Mid Cap 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 Mid Cap 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 Mid Cap Value, you can compare the effects of market volatilities on Polar Capital and Mid Cap 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 Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Mid Cap.
Diversification Opportunities for Polar Capital and Mid Cap
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Polar and Mid is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Emerging and Mid Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Value 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 Mid Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Value has no effect on the direction of Polar Capital i.e., Polar Capital and Mid Cap go up and down completely randomly.
Pair Corralation between Polar Capital and Mid Cap
Assuming the 90 days horizon Polar Capital Emerging is expected to under-perform the Mid Cap. In addition to that, Polar Capital is 1.2 times more volatile than Mid Cap Value. It trades about -0.2 of its total potential returns per unit of risk. Mid Cap Value is currently generating about 0.28 per unit of volatility. If you would invest 1,698 in Mid Cap Value on August 30, 2024 and sell it today you would earn a total of 85.00 from holding Mid Cap Value or generate 5.01% 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. Mid Cap Value
Performance |
| Timeline |
| Polar Capital Emerging |
| Mid Cap Value |
Polar Capital and Mid Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Mid Cap
The main advantage of trading using opposite Polar Capital and Mid Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, Mid Cap 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 Mid Cap will offset losses from the drop in Mid Cap's long position.| Polar Capital vs. Allianzgi Convertible Income | Polar Capital vs. Fidelity Sai Convertible | Polar Capital vs. Virtus Convertible | Polar Capital vs. Rationalpier 88 Convertible |
| Mid Cap vs. Janus Triton Fund | Mid Cap vs. New World Fund | Mid Cap vs. Fidelity Mid Cap | Mid Cap vs. Mfs Value Fund |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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