Correlation Between MG Plc and Polar Capital
Can any of the company-specific risk be diversified away by investing in both MG Plc 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 MG Plc and Polar Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MG Plc and Polar Capital Technology, you can compare the effects of market volatilities on MG Plc 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 MG Plc with a short position of Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of MG Plc and Polar Capital.
Diversification Opportunities for MG Plc and Polar Capital
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MNG and Polar is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding MG 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 MG Plc 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 MG 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 MG Plc i.e., MG Plc and Polar Capital go up and down completely randomly.
Pair Corralation between MG Plc and Polar Capital
Assuming the 90 days trading horizon MG Plc is expected to generate 0.62 times more return on investment than Polar Capital. However, MG Plc is 1.6 times less risky than Polar Capital. It trades about 0.14 of its potential returns per unit of risk. Polar Capital Technology is currently generating about -0.11 per unit of risk. If you would invest 18,361 in MG Plc on December 29, 2024 and sell it today you would earn a total of 1,979 from holding MG Plc or generate 10.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MG Plc vs. Polar Capital Technology
Performance |
Timeline |
MG Plc |
Polar Capital Technology |
MG Plc and Polar Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MG Plc and Polar Capital
The main advantage of trading using opposite MG Plc and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MG Plc 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.MG Plc vs. Nordic Semiconductor ASA | MG Plc vs. Taiwan Semiconductor Manufacturing | MG Plc vs. Dairy Farm International | MG Plc vs. Silvercorp Metals |
Polar Capital vs. Hardide PLC | Polar Capital vs. Quantum Blockchain Technologies | Polar Capital vs. Malvern International | Polar Capital vs. SANTANDER UK 10 |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |