Correlation Between Polaris Office and Bosung Power
Can any of the company-specific risk be diversified away by investing in both Polaris Office and Bosung Power 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 Bosung Power 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 Bosung Power Technology, you can compare the effects of market volatilities on Polaris Office and Bosung Power 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 Bosung Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Office and Bosung Power.
Diversification Opportunities for Polaris Office and Bosung Power
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Polaris and Bosung is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Office Corp and Bosung Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosung Power Technology 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 Bosung Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosung Power Technology has no effect on the direction of Polaris Office i.e., Polaris Office and Bosung Power go up and down completely randomly.
Pair Corralation between Polaris Office and Bosung Power
Assuming the 90 days trading horizon Polaris Office is expected to generate 1.33 times less return on investment than Bosung Power. In addition to that, Polaris Office is 2.22 times more volatile than Bosung Power Technology. It trades about 0.05 of its total potential returns per unit of risk. Bosung Power Technology is currently generating about 0.14 per unit of volatility. If you would invest 250,500 in Bosung Power Technology on October 12, 2024 and sell it today you would earn a total of 12,000 from holding Bosung Power Technology or generate 4.79% 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. Bosung Power Technology
Performance |
| Timeline |
| Polaris Office Corp |
| Bosung Power Technology |
Polaris Office and Bosung Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Office and Bosung Power
The main advantage of trading using opposite Polaris Office and Bosung Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Office position performs unexpectedly, Bosung Power 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 Bosung Power will offset losses from the drop in Bosung Power's long position.| Polaris Office vs. Worldex Industry Trading | Polaris Office vs. Samyung Trading Co | Polaris Office vs. Heungkuk Metaltech CoLtd | Polaris Office vs. MetaLabs Co |
| Bosung Power vs. BIT Computer Co | Bosung Power vs. Polaris Office Corp | Bosung Power vs. Digital Power Communications | Bosung Power vs. Nable Communications |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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