Correlation Between Polaris Office and Mobile Appliance
Can any of the company-specific risk be diversified away by investing in both Polaris Office and Mobile Appliance 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 Mobile Appliance 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 Mobile Appliance, you can compare the effects of market volatilities on Polaris Office and Mobile Appliance 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 Mobile Appliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Office and Mobile Appliance.
Diversification Opportunities for Polaris Office and Mobile Appliance
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Polaris and Mobile is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Office Corp and Mobile Appliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Appliance 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 Mobile Appliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Appliance has no effect on the direction of Polaris Office i.e., Polaris Office and Mobile Appliance go up and down completely randomly.
Pair Corralation between Polaris Office and Mobile Appliance
Assuming the 90 days trading horizon Polaris Office Corp is expected to generate 1.87 times more return on investment than Mobile Appliance. However, Polaris Office is 1.87 times more volatile than Mobile Appliance. It trades about 0.08 of its potential returns per unit of risk. Mobile Appliance is currently generating about -0.01 per unit of risk. If you would invest 151,000 in Polaris Office Corp on September 3, 2024 and sell it today you would earn a total of 502,000 from holding Polaris Office Corp or generate 332.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polaris Office Corp vs. Mobile Appliance
Performance |
| Timeline |
| Polaris Office Corp |
| Mobile Appliance |
Polaris Office and Mobile Appliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Office and Mobile Appliance
The main advantage of trading using opposite Polaris Office and Mobile Appliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Office position performs unexpectedly, Mobile Appliance 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 Mobile Appliance will offset losses from the drop in Mobile Appliance'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 |
| Mobile Appliance vs. Daishin Information Communications | Mobile Appliance vs. BNK Financial Group | Mobile Appliance vs. Jb Financial | Mobile Appliance vs. Shinhan Financial Group |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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