Correlation Between Nomura Funds and Polar Capital

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

By analyzing existing cross correlation between Nomura Funds Ireland and Polar Capital Funds, you can compare the effects of market volatilities on Nomura Funds 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 Nomura Funds with a short position of Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Funds and Polar Capital.

Diversification Opportunities for Nomura Funds and Polar Capital

0.0

Correlation Coefficient

Nomura Funds  Polar Capital

Pay attention - limited upside

The 3 months correlation between Nomura and Polar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Funds Ireland and Polar Capital Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Funds and Nomura Funds 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 Nomura Funds Ireland 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 Funds has no effect on the direction of Nomura Funds i.e., Nomura Funds and Polar Capital go up and down completely randomly.

Pair Corralation between Nomura Funds and Polar Capital

If you would invest  28,091  in Polar Capital Funds on September 21, 2024 and sell it today you would earn a total of  7,206  from holding Polar Capital Funds or generate 25.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.34%
Values	Daily Returns

Nomura Funds Ireland  vs.  Polar Capital Funds

Nomura Funds Ireland

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nomura Funds Ireland has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, Nomura Funds is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Polar Capital Funds

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Polar Capital Funds are ranked lower than 9 (%) 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.

Pair Trading with Nomura Funds and Polar Capital

The main advantage of trading using opposite Nomura Funds and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Funds 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.

The idea behind Nomura Funds Ireland and Polar Capital Funds 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.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.