Correlation Between Polaris Office and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both Polaris Office and Hyundai Engineering 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 Polaris Office and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polaris Office Corp and Hyundai Engineering Construction, you can compare the effects of market volatilities on Polaris Office and Hyundai Engineering 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 Polaris Office with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Office and Hyundai Engineering.
Diversification Opportunities for Polaris Office and Hyundai Engineering
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Polaris and Hyundai is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Office Corp and Hyundai Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and Polaris Office 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 Polaris Office Corp are associated (or correlated) with Hyundai Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Engineering has no effect on the direction of Polaris Office i.e., Polaris Office and Hyundai Engineering go up and down completely randomly.
Pair Corralation between Polaris Office and Hyundai Engineering
Assuming the 90 days trading horizon Polaris Office Corp is expected to generate 3.13 times more return on investment than Hyundai Engineering. However, Polaris Office is 3.13 times more volatile than Hyundai Engineering Construction. It trades about 0.04 of its potential returns per unit of risk. Hyundai Engineering Construction is currently generating about -0.05 per unit of risk. If you would invest 455,500 in Polaris Office Corp on October 16, 2024 and sell it today you would earn a total of 113,500 from holding Polaris Office Corp or generate 24.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polaris Office Corp vs. Hyundai Engineering Constructi
Performance |
| Timeline |
| Polaris Office Corp |
| Hyundai Engineering |
Polaris Office and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Office and Hyundai Engineering
The main advantage of trading using opposite Polaris Office and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Office position performs unexpectedly, Hyundai Engineering 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 Hyundai Engineering will offset losses from the drop in Hyundai Engineering's long position.| Polaris Office vs. Seoul Electronics Telecom | Polaris Office vs. Daeduck Electronics Co | Polaris Office vs. Mgame Corp | Polaris Office vs. Samyoung Electronics Co |
| Hyundai Engineering vs. KT Submarine Telecom | Hyundai Engineering vs. E Investment Development | Hyundai Engineering vs. Korea Information Communications | Hyundai Engineering vs. Polaris Office Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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