Correlation Between Young Cos and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Young Cos 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 Young Cos and Polar Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Young Cos Brewery and Polar Capital Technology, you can compare the effects of market volatilities on Young Cos 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 Young Cos with a short position of Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Young Cos and Polar Capital.
Diversification Opportunities for Young Cos and Polar Capital
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Young and Polar is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Young Cos Brewery 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 Young Cos 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 Young Cos Brewery 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 Young Cos i.e., Young Cos and Polar Capital go up and down completely randomly.
Pair Corralation between Young Cos and Polar Capital
Assuming the 90 days trading horizon Young Cos Brewery is expected to generate 0.92 times more return on investment than Polar Capital. However, Young Cos Brewery is 1.09 times less risky than Polar Capital. It trades about 0.12 of its potential returns per unit of risk. Polar Capital Technology is currently generating about 0.05 per unit of risk. If you would invest 61,079 in Young Cos Brewery on September 12, 2024 and sell it today you would earn a total of 1,721 from holding Young Cos Brewery or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Young Cos Brewery vs. Polar Capital Technology
Performance |
| Timeline |
| Young Cos Brewery |
| Polar Capital Technology |
Young Cos and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Young Cos and Polar Capital
The main advantage of trading using opposite Young Cos and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Young Cos 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.| Young Cos vs. National Atomic Co | Young Cos vs. OTP Bank Nyrt | Young Cos vs. Samsung Electronics Co | Young Cos vs. Samsung Electronics Co |
| Polar Capital vs. Beowulf Mining | Polar Capital vs. Atalaya Mining | Polar Capital vs. Caledonia Mining | Polar Capital vs. Cairo Communication SpA |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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