Correlation Between Polaris Office and Sunny Electronics
Can any of the company-specific risk be diversified away by investing in both Polaris Office and Sunny Electronics 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 Sunny Electronics 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 Sunny Electronics Corp, you can compare the effects of market volatilities on Polaris Office and Sunny Electronics 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 Sunny Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Office and Sunny Electronics.
Diversification Opportunities for Polaris Office and Sunny Electronics
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Polaris and Sunny is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Office Corp and Sunny Electronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Electronics Corp 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 Sunny Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Electronics Corp has no effect on the direction of Polaris Office i.e., Polaris Office and Sunny Electronics go up and down completely randomly.
Pair Corralation between Polaris Office and Sunny Electronics
Assuming the 90 days trading horizon Polaris Office Corp is expected to generate 3.14 times more return on investment than Sunny Electronics. However, Polaris Office is 3.14 times more volatile than Sunny Electronics Corp. It trades about 0.08 of its potential returns per unit of risk. Sunny Electronics Corp is currently generating about -0.08 per unit of risk. If you would invest 152,000 in Polaris Office Corp on August 27, 2024 and sell it today you would earn a total of 398,000 from holding Polaris Office Corp or generate 261.84% 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. Sunny Electronics Corp
Performance |
| Timeline |
| Polaris Office Corp |
| Sunny Electronics Corp |
Polaris Office and Sunny Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Office and Sunny Electronics
The main advantage of trading using opposite Polaris Office and Sunny Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Office position performs unexpectedly, Sunny Electronics 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 Sunny Electronics will offset losses from the drop in Sunny Electronics' long position.| Polaris Office vs. Korea Real Estate | Polaris Office vs. Korea Ratings Co | Polaris Office vs. IQuest Co | Polaris Office vs. Wonbang Tech Co |
| Sunny Electronics vs. AptaBio Therapeutics | Sunny Electronics vs. Daewoo SBI SPAC | Sunny Electronics vs. Dream Security co | Sunny Electronics vs. Microfriend |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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