Correlation Between Polaris Office and Korea Real
Can any of the company-specific risk be diversified away by investing in both Polaris Office and Korea Real 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 Korea Real 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 Korea Real Estate, you can compare the effects of market volatilities on Polaris Office and Korea Real 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 Korea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Office and Korea Real.
Diversification Opportunities for Polaris Office and Korea Real
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Polaris and Korea is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Office Corp and Korea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Real Estate 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 Korea Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Real Estate has no effect on the direction of Polaris Office i.e., Polaris Office and Korea Real go up and down completely randomly.
Pair Corralation between Polaris Office and Korea Real
Assuming the 90 days trading horizon Polaris Office Corp is expected to generate 5.64 times more return on investment than Korea Real. However, Polaris Office is 5.64 times more volatile than Korea Real Estate. It trades about 0.06 of its potential returns per unit of risk. Korea Real Estate is currently generating about -0.04 per unit of risk. If you would invest 553,000 in Polaris Office Corp on August 29, 2024 and sell it today you would earn a total of 32,000 from holding Polaris Office Corp or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polaris Office Corp vs. Korea Real Estate
Performance |
| Timeline |
| Polaris Office Corp |
| Korea Real Estate |
Polaris Office and Korea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Office and Korea Real
The main advantage of trading using opposite Polaris Office and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Office position performs unexpectedly, Korea Real 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 Korea Real will offset losses from the drop in Korea Real's long position.| Polaris Office vs. Daou Data Corp | Polaris Office vs. Busan Industrial Co | Polaris Office vs. Busan Ind | Polaris Office vs. Shinhan WTI Futures |
| Korea Real vs. SCI Information Service | Korea Real vs. Shin Steel Co | Korea Real vs. Daishin Information Communications | Korea Real vs. Hankook Steel Co |
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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