Correlation Between Polygon and MCO
Can any of the company-specific risk be diversified away by investing in both Polygon and MCO 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 Polygon and MCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polygon and MCO, you can compare the effects of market volatilities on Polygon and MCO 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 Polygon with a short position of MCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polygon and MCO.
Diversification Opportunities for Polygon and MCO
Very good diversification
The 3 months correlation between Polygon and MCO is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Polygon and MCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCO and Polygon 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 Polygon are associated (or correlated) with MCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCO has no effect on the direction of Polygon i.e., Polygon and MCO go up and down completely randomly.
Pair Corralation between Polygon and MCO
Assuming the 90 days trading horizon Polygon is expected to under-perform the MCO. But the crypto coin apears to be less risky and, when comparing its historical volatility, Polygon is 18.16 times less risky than MCO. The crypto coin trades about 0.0 of its potential returns per unit of risk. The MCO is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 258.00 in MCO on January 19, 2024 and sell it today you would earn a total of 1,067 from holding MCO or generate 413.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polygon vs. MCO
Performance |
| Timeline |
| Polygon |
| MCO |
Polygon and MCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polygon and MCO
The main advantage of trading using opposite Polygon and MCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polygon position performs unexpectedly, MCO 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 MCO will offset losses from the drop in MCO's long position.The idea behind Polygon and MCO 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |