Correlation Between Polaris Office and Daesung Hi
Can any of the company-specific risk be diversified away by investing in both Polaris Office and Daesung Hi 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 Daesung Hi 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 Daesung Hi Tech Co, you can compare the effects of market volatilities on Polaris Office and Daesung Hi 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 Daesung Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Office and Daesung Hi.
Diversification Opportunities for Polaris Office and Daesung Hi
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Polaris and Daesung is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Office Corp and Daesung Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Hi 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 Daesung Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Hi Tech has no effect on the direction of Polaris Office i.e., Polaris Office and Daesung Hi go up and down completely randomly.
Pair Corralation between Polaris Office and Daesung Hi
Assuming the 90 days trading horizon Polaris Office Corp is expected to generate 3.68 times more return on investment than Daesung Hi. However, Polaris Office is 3.68 times more volatile than Daesung Hi Tech Co. It trades about 0.23 of its potential returns per unit of risk. Daesung Hi Tech Co is currently generating about -0.24 per unit of risk. If you would invest 507,000 in Polaris Office Corp on September 2, 2024 and sell it today you would earn a total of 146,000 from holding Polaris Office Corp or generate 28.8% 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. Daesung Hi Tech Co
Performance |
| Timeline |
| Polaris Office Corp |
| Daesung Hi Tech |
Polaris Office and Daesung Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Office and Daesung Hi
The main advantage of trading using opposite Polaris Office and Daesung Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Office position performs unexpectedly, Daesung Hi 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 Daesung Hi will offset losses from the drop in Daesung Hi's long position.| Polaris Office vs. LG Household Healthcare | Polaris Office vs. SCI Information Service | Polaris Office vs. Korea Alcohol Industrial | Polaris Office vs. Dongbang Transport Logistics |
| Daesung Hi vs. Samsung Electronics Co | Daesung Hi vs. Samsung Electronics Co | Daesung Hi vs. LG Energy Solution | Daesung Hi vs. SK Hynix |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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