Correlation Between Hanil Chemical and Polaris Office
Can any of the company-specific risk be diversified away by investing in both Hanil Chemical 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 Hanil Chemical and Polaris Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanil Chemical Ind and Polaris Office Corp, you can compare the effects of market volatilities on Hanil Chemical 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 Hanil Chemical with a short position of Polaris Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanil Chemical and Polaris Office.
Diversification Opportunities for Hanil Chemical and Polaris Office
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanil and Polaris is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hanil Chemical Ind 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 Hanil Chemical 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 Hanil Chemical Ind 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 Hanil Chemical i.e., Hanil Chemical and Polaris Office go up and down completely randomly.
Pair Corralation between Hanil Chemical and Polaris Office
Assuming the 90 days trading horizon Hanil Chemical Ind is expected to under-perform the Polaris Office. But the stock apears to be less risky and, when comparing its historical volatility, Hanil Chemical Ind is 3.18 times less risky than Polaris Office. The stock trades about -0.08 of its potential returns per unit of risk. The Polaris Office Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 508,000 in Polaris Office Corp on September 14, 2024 and sell it today you would earn a total of 62,000 from holding Polaris Office Corp or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.62% |
| Values | Daily Returns |
Hanil Chemical Ind vs. Polaris Office Corp
Performance |
| Timeline |
| Hanil Chemical Ind |
| Polaris Office Corp |
Hanil Chemical and Polaris Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanil Chemical and Polaris Office
The main advantage of trading using opposite Hanil Chemical and Polaris Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanil Chemical 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.| Hanil Chemical vs. Polaris Office Corp | Hanil Chemical vs. Samhyun Steel Co | Hanil Chemical vs. Wonil Special Steel | Hanil Chemical vs. Innowireless Co |
| Polaris Office vs. SungMoon Electronics Co | Polaris Office vs. ABCO Electronics Co | Polaris Office vs. SK Chemicals Co | Polaris Office vs. Miwon Chemicals 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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