Correlation Between Polaris Office and Miwon Chemicals
Can any of the company-specific risk be diversified away by investing in both Polaris Office and Miwon Chemicals 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 Miwon Chemicals 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 Miwon Chemicals Co, you can compare the effects of market volatilities on Polaris Office and Miwon Chemicals 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 Miwon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Office and Miwon Chemicals.
Diversification Opportunities for Polaris Office and Miwon Chemicals
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polaris and Miwon is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Office Corp and Miwon Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemicals 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 Miwon Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miwon Chemicals has no effect on the direction of Polaris Office i.e., Polaris Office and Miwon Chemicals go up and down completely randomly.
Pair Corralation between Polaris Office and Miwon Chemicals
Assuming the 90 days trading horizon Polaris Office Corp is expected to generate 5.87 times more return on investment than Miwon Chemicals. However, Polaris Office is 5.87 times more volatile than Miwon Chemicals Co. It trades about 0.06 of its potential returns per unit of risk. Miwon Chemicals Co is currently generating about 0.07 per unit of risk. If you would invest 298,000 in Polaris Office Corp on September 4, 2024 and sell it today you would earn a total of 353,000 from holding Polaris Office Corp or generate 118.46% 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. Miwon Chemicals Co
Performance |
| Timeline |
| Polaris Office Corp |
| Miwon Chemicals |
Polaris Office and Miwon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Office and Miwon Chemicals
The main advantage of trading using opposite Polaris Office and Miwon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Office position performs unexpectedly, Miwon Chemicals 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 Miwon Chemicals will offset losses from the drop in Miwon Chemicals' long position.| Polaris Office vs. Dongsin Engineering Construction | Polaris Office vs. Doosan Fuel Cell | Polaris Office vs. Daishin Balance 1 | Polaris Office vs. Total Soft Bank |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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