Correlation Between Polaris International and MGC Ventures

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

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

Diversification Opportunities for Polaris International and MGC Ventures

0.48

Correlation Coefficient

Polaris International  MGC Ventures

Very weak diversification

The 3 months correlation between Polaris and MGC is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Polaris International Holdings and MGC Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGC Ventures and Polaris International 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 Polaris International Holdings are associated (or correlated) with MGC Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGC Ventures has no effect on the direction of Polaris International i.e., Polaris International and MGC Ventures go up and down completely randomly.

Pair Corralation between Polaris International and MGC Ventures

If you would invest  3.20  in MGC Ventures on August 15, 2025 and sell it today you would earn a total of  0.60  from holding MGC Ventures or generate 18.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Polaris International Holdings  vs.  MGC Ventures

Polaris International

Risk-Adjusted Performance

Weakest

Over the last 90 days Polaris International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Polaris International is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

MGC Ventures

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in MGC Ventures are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, MGC Ventures showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Polaris International and MGC Ventures

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

The idea behind Polaris International Holdings and MGC Ventures 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.