Correlation Between Seoul Electronics and Polaris Office
Can any of the company-specific risk be diversified away by investing in both Seoul Electronics 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 Seoul Electronics and Polaris Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoul Electronics Telecom and Polaris Office Corp, you can compare the effects of market volatilities on Seoul Electronics 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 Seoul Electronics with a short position of Polaris Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Electronics and Polaris Office.
Diversification Opportunities for Seoul Electronics and Polaris Office
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seoul and Polaris is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Electronics Telecom 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 Seoul Electronics 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 Seoul Electronics Telecom 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 Seoul Electronics i.e., Seoul Electronics and Polaris Office go up and down completely randomly.
Pair Corralation between Seoul Electronics and Polaris Office
Assuming the 90 days trading horizon Seoul Electronics Telecom is expected to under-perform the Polaris Office. But the stock apears to be less risky and, when comparing its historical volatility, Seoul Electronics Telecom is 1.65 times less risky than Polaris Office. The stock trades about -0.03 of its potential returns per unit of risk. The Polaris Office Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 422,500 in Polaris Office Corp on October 16, 2024 and sell it today you would earn a total of 158,500 from holding Polaris Office Corp or generate 37.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Electronics Telecom vs. Polaris Office Corp
Performance |
| Timeline |
| Seoul Electronics Telecom |
| Polaris Office Corp |
Seoul Electronics and Polaris Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Electronics and Polaris Office
The main advantage of trading using opposite Seoul Electronics and Polaris Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Electronics 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.| Seoul Electronics vs. Union Materials Corp | Seoul Electronics vs. PI Advanced Materials | Seoul Electronics vs. Top Material Co | Seoul Electronics vs. Miwon Chemicals Co |
| Polaris Office vs. Dongil Metal Co | Polaris Office vs. MetaLabs Co | Polaris Office vs. ECSTELECOM Co | Polaris Office vs. Duksan Hi Metal |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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