Correlation Between Kwang Jin and Polaris Office
Can any of the company-specific risk be diversified away by investing in both Kwang Jin 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 Kwang Jin and Polaris Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kwang Jin Ind and Polaris Office Corp, you can compare the effects of market volatilities on Kwang Jin 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 Kwang Jin with a short position of Polaris Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kwang Jin and Polaris Office.
Diversification Opportunities for Kwang Jin and Polaris Office
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kwang and Polaris is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kwang Jin 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 Kwang Jin 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 Kwang Jin 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 Kwang Jin i.e., Kwang Jin and Polaris Office go up and down completely randomly.
Pair Corralation between Kwang Jin and Polaris Office
Assuming the 90 days trading horizon Kwang Jin is expected to generate 1.8 times less return on investment than Polaris Office. But when comparing it to its historical volatility, Kwang Jin Ind is 3.51 times less risky than Polaris Office. It trades about 0.07 of its potential returns per unit of risk. Polaris Office Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 590,000 in Polaris Office Corp on September 19, 2024 and sell it today you would earn a total of 9,000 from holding Polaris Office Corp or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kwang Jin Ind vs. Polaris Office Corp
Performance |
| Timeline |
| Kwang Jin Ind |
| Polaris Office Corp |
Kwang Jin and Polaris Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kwang Jin and Polaris Office
The main advantage of trading using opposite Kwang Jin and Polaris Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kwang Jin 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.| Kwang Jin vs. SK Telecom Co | Kwang Jin vs. Korea Information Communications | Kwang Jin vs. Hansol Homedeco Co | Kwang Jin vs. Kukil Metal Co |
| Polaris Office vs. Adaptive Plasma Technology | Polaris Office vs. Samsung Publishing Co | Polaris Office vs. Neungyule Education | Polaris Office vs. Hanjin Transportation 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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