Correlation Between Polaris Office and Koh Young
Can any of the company-specific risk be diversified away by investing in both Polaris Office and Koh Young 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 Koh Young 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 Koh Young Technology, you can compare the effects of market volatilities on Polaris Office and Koh Young 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 Koh Young. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Office and Koh Young.
Diversification Opportunities for Polaris Office and Koh Young
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Polaris and Koh is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Office Corp and Koh Young Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koh Young 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 Koh Young. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koh Young Technology has no effect on the direction of Polaris Office i.e., Polaris Office and Koh Young go up and down completely randomly.
Pair Corralation between Polaris Office and Koh Young
Assuming the 90 days trading horizon Polaris Office Corp is expected to generate 0.98 times more return on investment than Koh Young. However, Polaris Office Corp is 1.02 times less risky than Koh Young. It trades about 0.0 of its potential returns per unit of risk. Koh Young Technology is currently generating about -0.06 per unit of risk. If you would invest 610,000 in Polaris Office Corp on December 8, 2024 and sell it today you would lose (10,000) from holding Polaris Office Corp or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polaris Office Corp vs. Koh Young Technology
Performance |
| Timeline |
| Polaris Office Corp |
| Koh Young Technology |
Polaris Office and Koh Young Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Office and Koh Young
The main advantage of trading using opposite Polaris Office and Koh Young positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Office position performs unexpectedly, Koh Young 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 Koh Young will offset losses from the drop in Koh Young's long position.| Polaris Office vs. Asiana Airlines | Polaris Office vs. Ssangyong Information Communication | Polaris Office vs. MediaZen | Polaris Office vs. SM Entertainment 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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