Correlation Between Polaris Office and Jeju Bank
Can any of the company-specific risk be diversified away by investing in both Polaris Office and Jeju Bank 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 Jeju Bank 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 Jeju Bank, you can compare the effects of market volatilities on Polaris Office and Jeju Bank 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 Jeju Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Office and Jeju Bank.
Diversification Opportunities for Polaris Office and Jeju Bank
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polaris and Jeju is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Office Corp and Jeju Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Bank 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 Jeju Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Bank has no effect on the direction of Polaris Office i.e., Polaris Office and Jeju Bank go up and down completely randomly.
Pair Corralation between Polaris Office and Jeju Bank
Assuming the 90 days trading horizon Polaris Office Corp is expected to generate 1.46 times more return on investment than Jeju Bank. However, Polaris Office is 1.46 times more volatile than Jeju Bank. It trades about 0.07 of its potential returns per unit of risk. Jeju Bank is currently generating about -0.01 per unit of risk. If you would invest 146,200 in Polaris Office Corp on October 13, 2024 and sell it today you would earn a total of 439,800 from holding Polaris Office Corp or generate 300.82% 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. Jeju Bank
Performance |
| Timeline |
| Polaris Office Corp |
| Jeju Bank |
Polaris Office and Jeju Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Office and Jeju Bank
The main advantage of trading using opposite Polaris Office and Jeju Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Office position performs unexpectedly, Jeju Bank 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 Jeju Bank will offset losses from the drop in Jeju Bank'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 |
| Jeju Bank vs. Moadata Co | Jeju Bank vs. Polaris Office Corp | Jeju Bank vs. Lotte Data Communication | Jeju Bank vs. NICE Information Service |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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