Correlation Between Polaris Office and Dongbang Transport
Can any of the company-specific risk be diversified away by investing in both Polaris Office and Dongbang Transport 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 Dongbang Transport 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 Dongbang Transport Logistics, you can compare the effects of market volatilities on Polaris Office and Dongbang Transport 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 Dongbang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Office and Dongbang Transport.
Diversification Opportunities for Polaris Office and Dongbang Transport
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polaris and Dongbang is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Office Corp and Dongbang Transport Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Transport 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 Dongbang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Transport has no effect on the direction of Polaris Office i.e., Polaris Office and Dongbang Transport go up and down completely randomly.
Pair Corralation between Polaris Office and Dongbang Transport
Assuming the 90 days trading horizon Polaris Office is expected to generate 1.46 times less return on investment than Dongbang Transport. In addition to that, Polaris Office is 3.22 times more volatile than Dongbang Transport Logistics. It trades about 0.05 of its total potential returns per unit of risk. Dongbang Transport Logistics is currently generating about 0.25 per unit of volatility. If you would invest 216,000 in Dongbang Transport Logistics on October 13, 2024 and sell it today you would earn a total of 13,500 from holding Dongbang Transport Logistics or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polaris Office Corp vs. Dongbang Transport Logistics
Performance |
| Timeline |
| Polaris Office Corp |
| Dongbang Transport |
Polaris Office and Dongbang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Office and Dongbang Transport
The main advantage of trading using opposite Polaris Office and Dongbang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Office position performs unexpectedly, Dongbang Transport 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 Dongbang Transport will offset losses from the drop in Dongbang Transport's long position.| Polaris Office vs. Youngbo Chemical Co | Polaris Office vs. Digital Power Communications | Polaris Office vs. Namhae Chemical | Polaris Office vs. Kyung In Synthetic Corp |
| Dongbang Transport vs. Lotte Non Life Insurance | Dongbang Transport vs. Samsung Life Insurance | Dongbang Transport vs. Woorim Machinery Co | Dongbang Transport 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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