Correlation Between Polaris Office and Digital Imaging
Can any of the company-specific risk be diversified away by investing in both Polaris Office and Digital Imaging 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 Digital Imaging 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 Digital Imaging Technology, you can compare the effects of market volatilities on Polaris Office and Digital Imaging 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 Digital Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Office and Digital Imaging.
Diversification Opportunities for Polaris Office and Digital Imaging
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polaris and Digital is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Office Corp and Digital Imaging Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Imaging Tech 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 Digital Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Imaging Tech has no effect on the direction of Polaris Office i.e., Polaris Office and Digital Imaging go up and down completely randomly.
Pair Corralation between Polaris Office and Digital Imaging
Assuming the 90 days trading horizon Polaris Office is expected to generate 1.66 times less return on investment than Digital Imaging. In addition to that, Polaris Office is 1.25 times more volatile than Digital Imaging Technology. It trades about 0.1 of its total potential returns per unit of risk. Digital Imaging Technology is currently generating about 0.2 per unit of volatility. If you would invest 1,092,000 in Digital Imaging Technology on September 20, 2024 and sell it today you would earn a total of 211,000 from holding Digital Imaging Technology or generate 19.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polaris Office Corp vs. Digital Imaging Technology
Performance |
| Timeline |
| Polaris Office Corp |
| Digital Imaging Tech |
Polaris Office and Digital Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Office and Digital Imaging
The main advantage of trading using opposite Polaris Office and Digital Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Office position performs unexpectedly, Digital Imaging 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 Digital Imaging will offset losses from the drop in Digital Imaging's long position.| Polaris Office vs. Adaptive Plasma Technology | Polaris Office vs. Samsung Publishing Co | Polaris Office vs. Neungyule Education | Polaris Office vs. Hanjin Transportation Co |
| Digital Imaging vs. Nice Information Telecommunication | Digital Imaging vs. Aprogen Healthcare Games | Digital Imaging vs. CKH Food Health | Digital Imaging vs. Insung Information 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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