Correlation Between Lotte Non and Polaris Office
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Polaris Office 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 Lotte Non and Polaris Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Non Life Insurance and Polaris Office Corp, you can compare the effects of market volatilities on Lotte Non and Polaris Office 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 Lotte Non with a short position of Polaris Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Polaris Office.
Diversification Opportunities for Lotte Non and Polaris Office
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lotte and Polaris is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and Polaris Office Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polaris Office Corp and Lotte Non 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 Lotte Non Life Insurance are associated (or correlated) with Polaris Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polaris Office Corp has no effect on the direction of Lotte Non i.e., Lotte Non and Polaris Office go up and down completely randomly.
Pair Corralation between Lotte Non and Polaris Office
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to under-perform the Polaris Office. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Non Life Insurance is 1.64 times less risky than Polaris Office. The stock trades about -0.15 of its potential returns per unit of risk. The Polaris Office Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 506,000 in Polaris Office Corp on August 28, 2024 and sell it today you would earn a total of 79,000 from holding Polaris Office Corp or generate 15.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life Insurance vs. Polaris Office Corp
Performance |
| Timeline |
| Lotte Non Life |
| Polaris Office Corp |
Lotte Non and Polaris Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Polaris Office
The main advantage of trading using opposite Lotte Non and Polaris Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Polaris Office 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 Polaris Office will offset losses from the drop in Polaris Office's long position.| Lotte Non vs. AptaBio Therapeutics | Lotte Non vs. Daewoo SBI SPAC | Lotte Non vs. Dream Security co | Lotte Non vs. Microfriend |
| Polaris Office vs. Korea Real Estate | Polaris Office vs. Korea Ratings Co | Polaris Office vs. IQuest Co | Polaris Office vs. Wonbang Tech Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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