Correlation Between PMGR Securities and Polar Capital

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

By analyzing existing cross correlation between PMGR Securities 2025 and Polar Capital Funds, you can compare the effects of market volatilities on PMGR Securities 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 PMGR Securities with a short position of Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMGR Securities and Polar Capital.

Diversification Opportunities for PMGR Securities and Polar Capital

0.78

Correlation Coefficient

PMGR Securities  Polar Capital

Poor diversification

The 3 months correlation between PMGR and Polar is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding PMGR Securities 2025 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 PMGR Securities 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 PMGR Securities 2025 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 PMGR Securities i.e., PMGR Securities and Polar Capital go up and down completely randomly.

Pair Corralation between PMGR Securities and Polar Capital

Assuming the 90 days trading horizon PMGR Securities is expected to generate 1.5 times less return on investment than Polar Capital. But when comparing it to its historical volatility, PMGR Securities 2025 is 12.53 times less risky than Polar Capital. It trades about 0.22 of its potential returns per unit of risk. Polar Capital Funds is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  34,245  in Polar Capital Funds on September 22, 2024 and sell it today you would earn a total of  1,052  from holding Polar Capital Funds or generate 3.07% return on investment over 90 days.

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

PMGR Securities 2025  vs.  Polar Capital Funds

PMGR Securities 2025

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PMGR Securities 2025 are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively stable basic indicators, PMGR Securities is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with PMGR Securities and Polar Capital

The main advantage of trading using opposite PMGR Securities and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMGR Securities 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 PMGR Securities 2025 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.