Correlation Between Polar Capital and Atalaya Mining

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

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

Diversification Opportunities for Polar Capital and Atalaya Mining

-0.63

Correlation Coefficient

Polar Capital  Atalaya Mining

Excellent diversification

The 3 months correlation between Polar and Atalaya is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and Atalaya Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atalaya Mining 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 Technology are associated (or correlated) with Atalaya Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atalaya Mining has no effect on the direction of Polar Capital i.e., Polar Capital and Atalaya Mining go up and down completely randomly.

Pair Corralation between Polar Capital and Atalaya Mining

Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 0.6 times more return on investment than Atalaya Mining. However, Polar Capital Technology is 1.66 times less risky than Atalaya Mining. It trades about 0.17 of its potential returns per unit of risk. Atalaya Mining is currently generating about -0.05 per unit of risk. If you would invest  31,120  in Polar Capital Technology on October 10, 2024 and sell it today you would earn a total of  4,230  from holding Polar Capital Technology or generate 13.59% return on investment over 90 days.

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

Polar Capital Technology  vs.  Atalaya Mining

Polar Capital Technology

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Polar Capital Technology are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Polar Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Atalaya Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atalaya Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Polar Capital and Atalaya Mining

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

The idea behind Polar Capital Technology and Atalaya Mining 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.