Correlation Between Dongwon System and Polaris Office
Can any of the company-specific risk be diversified away by investing in both Dongwon System 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 Dongwon System and Polaris Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwon System and Polaris Office Corp, you can compare the effects of market volatilities on Dongwon System 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 Dongwon System with a short position of Polaris Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwon System and Polaris Office.
Diversification Opportunities for Dongwon System and Polaris Office
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongwon and Polaris is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Dongwon System 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 Dongwon System 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 Dongwon System 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 Dongwon System i.e., Dongwon System and Polaris Office go up and down completely randomly.
Pair Corralation between Dongwon System and Polaris Office
Assuming the 90 days trading horizon Dongwon System is expected to generate 1.77 times less return on investment than Polaris Office. But when comparing it to its historical volatility, Dongwon System is 1.88 times less risky than Polaris Office. It trades about 0.04 of its potential returns per unit of risk. Polaris Office Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 505,000 in Polaris Office Corp on September 12, 2024 and sell it today you would earn a total of 61,000 from holding Polaris Office Corp or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwon System vs. Polaris Office Corp
Performance |
| Timeline |
| Dongwon System |
| Polaris Office Corp |
Dongwon System and Polaris Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwon System and Polaris Office
The main advantage of trading using opposite Dongwon System and Polaris Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwon System 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.| Dongwon System vs. LG Chemicals | Dongwon System vs. POSCO Holdings | Dongwon System vs. Hanwha Solutions | Dongwon System vs. Lotte Chemical Corp |
| Polaris Office vs. Cube Entertainment | Polaris Office vs. Dreamus Company | Polaris Office vs. LG Energy Solution | Polaris Office vs. Dongwon System |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |