Correlation Between Polaris Office and Sung Bo
Can any of the company-specific risk be diversified away by investing in both Polaris Office and Sung Bo 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 Sung Bo 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 Sung Bo Chemicals, you can compare the effects of market volatilities on Polaris Office and Sung Bo 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 Sung Bo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Office and Sung Bo.
Diversification Opportunities for Polaris Office and Sung Bo
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polaris and Sung is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Office Corp and Sung Bo Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sung Bo Chemicals 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 Sung Bo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sung Bo Chemicals has no effect on the direction of Polaris Office i.e., Polaris Office and Sung Bo go up and down completely randomly.
Pair Corralation between Polaris Office and Sung Bo
Assuming the 90 days trading horizon Polaris Office Corp is expected to generate 3.97 times more return on investment than Sung Bo. However, Polaris Office is 3.97 times more volatile than Sung Bo Chemicals. It trades about 0.08 of its potential returns per unit of risk. Sung Bo Chemicals is currently generating about -0.02 per unit of risk. If you would invest 140,500 in Polaris Office Corp on September 12, 2024 and sell it today you would earn a total of 425,500 from holding Polaris Office Corp or generate 302.85% 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. Sung Bo Chemicals
Performance |
| Timeline |
| Polaris Office Corp |
| Sung Bo Chemicals |
Polaris Office and Sung Bo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Office and Sung Bo
The main advantage of trading using opposite Polaris Office and Sung Bo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Office position performs unexpectedly, Sung Bo 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 Sung Bo will offset losses from the drop in Sung Bo's long position.| Polaris Office vs. Cube Entertainment | Polaris Office vs. Dreamus Company | Polaris Office vs. LG Energy Solution | Polaris Office vs. Dongwon System |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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