Correlation Between Polar Capital and IShares Physical

Can any of the company-specific risk be diversified away by investing in both Polar Capital and IShares Physical 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 IShares Physical 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 iShares Physical Silver, you can compare the effects of market volatilities on Polar Capital and IShares Physical 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 IShares Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and IShares Physical.

Diversification Opportunities for Polar Capital and IShares Physical

-0.49

Correlation Coefficient

Polar Capital  IShares Physical

Very good diversification

The 3 months correlation between Polar and IShares is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and iShares Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Physical Silver 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 IShares Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Physical Silver has no effect on the direction of Polar Capital i.e., Polar Capital and IShares Physical go up and down completely randomly.

Pair Corralation between Polar Capital and IShares Physical

Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 0.66 times more return on investment than IShares Physical. However, Polar Capital Technology is 1.52 times less risky than IShares Physical. It trades about 0.21 of its potential returns per unit of risk. iShares Physical Silver is currently generating about -0.05 per unit of risk. If you would invest  29,700  in Polar Capital Technology on September 24, 2024 and sell it today you would earn a total of  5,200  from holding Polar Capital Technology or generate 17.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.48%
Values	Daily Returns

Polar Capital Technology  vs.  iShares Physical Silver

Polar Capital Technology

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Polar Capital Technology are ranked lower than 16 (%) 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.

iShares Physical Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Physical Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, IShares Physical is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Polar Capital and IShares Physical

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

The idea behind Polar Capital Technology and iShares Physical Silver 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.