Correlation Between Polar Capital and ETC On

Can any of the company-specific risk be diversified away by investing in both Polar Capital and ETC On 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 ETC On into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Polar Capital Funds and ETC on CMCI, you can compare the effects of market volatilities on Polar Capital and ETC On 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 ETC On. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and ETC On.

Diversification Opportunities for Polar Capital and ETC On

0.48

Correlation Coefficient

Polar Capital  ETC On

Very weak diversification

The 3 months correlation between Polar and ETC is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Funds and ETC on CMCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETC on CMCI 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 Funds are associated (or correlated) with ETC On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETC on CMCI has no effect on the direction of Polar Capital i.e., Polar Capital and ETC On go up and down completely randomly.

Pair Corralation between Polar Capital and ETC On

Assuming the 90 days trading horizon Polar Capital is expected to generate 1.4 times less return on investment than ETC On. In addition to that, Polar Capital is 1.4 times more volatile than ETC on CMCI. It trades about 0.1 of its total potential returns per unit of risk. ETC on CMCI is currently generating about 0.2 per unit of volatility. If you would invest  17,422  in ETC on CMCI on September 22, 2024 and sell it today you would earn a total of  342.00  from holding ETC on CMCI or generate 1.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Polar Capital Funds  vs.  ETC on CMCI

Polar Capital Funds

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Polar Capital Funds are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Polar Capital is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

ETC on CMCI

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ETC on CMCI are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ETC On is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Polar Capital and ETC On

The main advantage of trading using opposite Polar Capital and ETC On positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, ETC On 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 ETC On will offset losses from the drop in ETC On's long position.

The idea behind Polar Capital Funds and ETC on CMCI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.