Correlation Between Polaris Office and BIT Computer
Can any of the company-specific risk be diversified away by investing in both Polaris Office and BIT Computer 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 BIT Computer 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 BIT Computer Co, you can compare the effects of market volatilities on Polaris Office and BIT Computer 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 BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Office and BIT Computer.
Diversification Opportunities for Polaris Office and BIT Computer
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Polaris and BIT is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Office Corp and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer 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 BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of Polaris Office i.e., Polaris Office and BIT Computer go up and down completely randomly.
Pair Corralation between Polaris Office and BIT Computer
Assuming the 90 days trading horizon Polaris Office Corp is expected to generate 3.61 times more return on investment than BIT Computer. However, Polaris Office is 3.61 times more volatile than BIT Computer Co. It trades about 0.22 of its potential returns per unit of risk. BIT Computer Co is currently generating about 0.04 per unit of risk. If you would invest 516,000 in Polaris Office Corp on September 3, 2024 and sell it today you would earn a total of 137,000 from holding Polaris Office Corp or generate 26.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polaris Office Corp vs. BIT Computer Co
Performance |
| Timeline |
| Polaris Office Corp |
| BIT Computer |
Polaris Office and BIT Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Office and BIT Computer
The main advantage of trading using opposite Polaris Office and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Office position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer's long position.| Polaris Office vs. Mobile Appliance | Polaris Office vs. KT Submarine Telecom | Polaris Office vs. Korea Alcohol Industrial | Polaris Office vs. Shinsegae Information Communication |
| BIT Computer vs. CKH Food Health | BIT Computer vs. Polaris Office Corp | BIT Computer vs. Cuckoo Homesys Co | BIT Computer vs. Samlip General Foods |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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