Correlation Between Itaconix Plc and Polar Capital

Can any of the company-specific risk be diversified away by investing in both Itaconix 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 Itaconix 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 Itaconix plc and Polar Capital Technology, you can compare the effects of market volatilities on Itaconix 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 Itaconix Plc with a short position of Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itaconix Plc and Polar Capital.

Diversification Opportunities for Itaconix Plc and Polar Capital

0.7

Correlation Coefficient

Itaconix Plc  Polar Capital

Poor diversification

The 3 months correlation between Itaconix and Polar is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Itaconix 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 Itaconix 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 Itaconix 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 Itaconix Plc i.e., Itaconix Plc and Polar Capital go up and down completely randomly.

Pair Corralation between Itaconix Plc and Polar Capital

Assuming the 90 days trading horizon Itaconix Plc is expected to generate 1.06 times less return on investment than Polar Capital. In addition to that, Itaconix Plc is 2.36 times more volatile than Polar Capital Technology. It trades about 0.18 of its total potential returns per unit of risk. Polar Capital Technology is currently generating about 0.44 per unit of volatility. If you would invest  27,900  in Polar Capital Technology on April 23, 2025 and sell it today you would earn a total of  10,950  from holding Polar Capital Technology or generate 39.25% return on investment over 90 days.

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

Itaconix plc  vs.  Polar Capital Technology

Itaconix plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Itaconix plc 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, Itaconix Plc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Polar Capital Technology

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Polar Capital Technology are ranked lower than 34 (%) 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.

Pair Trading with Itaconix Plc and Polar Capital

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

The idea behind Itaconix plc and Polar Capital Technology 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.