Correlation Between Various Eateries and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Various Eateries and Polar Capital 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 Various Eateries and Polar Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Various Eateries PLC and Polar Capital Technology, you can compare the effects of market volatilities on Various Eateries and Polar Capital 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 Various Eateries with a short position of Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Various Eateries and Polar Capital.
Diversification Opportunities for Various Eateries and Polar Capital
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Various and Polar is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Various Eateries PLC and Polar Capital Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Technology and Various Eateries 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 Various Eateries PLC are associated (or correlated) with Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Technology has no effect on the direction of Various Eateries i.e., Various Eateries and Polar Capital go up and down completely randomly.
Pair Corralation between Various Eateries and Polar Capital
Assuming the 90 days trading horizon Various Eateries is expected to generate 4.6 times less return on investment than Polar Capital. But when comparing it to its historical volatility, Various Eateries PLC is 5.65 times less risky than Polar Capital. It trades about 0.21 of its potential returns per unit of risk. Polar Capital Technology is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 31,450 in Polar Capital Technology on August 30, 2024 and sell it today you would earn a total of 2,000 from holding Polar Capital Technology or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Various Eateries PLC vs. Polar Capital Technology
Performance |
| Timeline |
| Various Eateries PLC |
| Polar Capital Technology |
Various Eateries and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Various Eateries and Polar Capital
The main advantage of trading using opposite Various Eateries and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Various Eateries position performs unexpectedly, Polar Capital 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 Polar Capital will offset losses from the drop in Polar Capital's long position.| Various Eateries vs. CVR Energy | Various Eateries vs. Viridian Therapeutics | Various Eateries vs. Nationwide Building Society | Various Eateries vs. Dollar Tree |
| Polar Capital vs. Samsung Electronics Co | Polar Capital vs. Samsung Electronics Co | Polar Capital vs. Hyundai Motor | Polar Capital vs. Toyota Motor Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |