Correlation Between Polaris Office and Puloon Technology
Can any of the company-specific risk be diversified away by investing in both Polaris Office and Puloon Technology 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 Puloon Technology 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 Puloon Technology, you can compare the effects of market volatilities on Polaris Office and Puloon Technology 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 Puloon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Office and Puloon Technology.
Diversification Opportunities for Polaris Office and Puloon Technology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Polaris and Puloon is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Office Corp and Puloon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puloon 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 Puloon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puloon Technology has no effect on the direction of Polaris Office i.e., Polaris Office and Puloon Technology go up and down completely randomly.
Pair Corralation between Polaris Office and Puloon Technology
Assuming the 90 days trading horizon Polaris Office Corp is expected to generate 1.05 times more return on investment than Puloon Technology. However, Polaris Office is 1.05 times more volatile than Puloon Technology. It trades about 0.15 of its potential returns per unit of risk. Puloon Technology is currently generating about 0.07 per unit of risk. If you would invest 479,000 in Polaris Office Corp on September 13, 2024 and sell it today you would earn a total of 91,000 from holding Polaris Office Corp or generate 19.0% 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. Puloon Technology
Performance |
| Timeline |
| Polaris Office Corp |
| Puloon Technology |
Polaris Office and Puloon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Office and Puloon Technology
The main advantage of trading using opposite Polaris Office and Puloon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Office position performs unexpectedly, Puloon Technology 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 Puloon Technology will offset losses from the drop in Puloon Technology's long position.| Polaris Office vs. Cube Entertainment | Polaris Office vs. Dreamus Company | Polaris Office vs. LG Energy Solution | Polaris Office vs. Dongwon System |
| Puloon Technology vs. LG Chemicals | Puloon Technology vs. Lotte Chilsung Beverage | Puloon Technology vs. Daejung Chemicals Metals | Puloon Technology vs. Jeju Beer 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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