Correlation Between Mantle and POLY

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

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

Diversification Opportunities for Mantle and POLY

-0.32

Correlation Coefficient

Mantle  POLY

Very good diversification

The 3 months correlation between Mantle and POLY is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Mantle and POLY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POLY and Mantle 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 Mantle are associated (or correlated) with POLY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POLY has no effect on the direction of Mantle i.e., Mantle and POLY go up and down completely randomly.

Pair Corralation between Mantle and POLY

If you would invest  58.00  in Mantle on September 1, 2024 and sell it today you would earn a total of  33.00  from holding Mantle or generate 56.9% return on investment over 90 days.

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

Mantle  vs.  POLY

Mantle

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mantle are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Mantle sustained solid returns over the last few months and may actually be approaching a breakup point.

POLY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days POLY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, POLY is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Mantle and POLY

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

The idea behind Mantle and POLY 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.