Thanee
First Post
One word of warning: If you polymorph a fire giant into a nice necklace to wear, you should be wary of dispels targeted at your location. That could be a lot of weight on your shoulders suddenly. 
On topic: The spell can polymorph magical items, but since what the spell does is changing the item itself, not its magical properties, those will stay the same. You can transform a magical shield into a magical armour with equal properties, or a magical sword into a magical club, but that's about it. Properties that cannot be used in the new form would be inert, until polymorphed into a suitable form.
Bye
Thanee

On topic: The spell can polymorph magical items, but since what the spell does is changing the item itself, not its magical properties, those will stay the same. You can transform a magical shield into a magical armour with equal properties, or a magical sword into a magical club, but that's about it. Properties that cannot be used in the new form would be inert, until polymorphed into a suitable form.
Bye
Thanee